PM Anwar: Malaysia’s fuel subsidy bill set to hit RM40b, more than double Budget estimate

KUALA LUMPUR, July 1 — Malaysia’s fuel subsidy bill is on track to reach nearly RM40 billion this year, more than double the RM15 billion allocated under Budget 2026, as the government absorbs the impact of the global energy crisis to keep retail fuel prices affordable.

Prime Minister Datuk Seri Anwar Ibrahim said the government spent RM1.6 billion on subsidies for RON95 petrol and diesel in January and February, before monthly subsidy costs surged to around RM5 billion in March and April as global crude oil prices climbed.

“If the current market price (of crude oil) remains, the government is expected to spend close to RM40 billion to subsidise petroleum products for 2026,” Anwar, who is also finance minister, said in a written parliamentary reply to Salamiah Nor (PN-Temerloh).

Anwar said the higher expenditure would allow eligible Malaysians to continue purchasing RON95 petrol at the subsidised price of RM1.99 a litre under the BUDI95 programme.

He added that diesel continues to be subsidised at RM1.65 a litre for fishermen and is sold at RM2.10 a litre under the BUDI Diesel initiative.

Separately, the subsidised petrol control system fixes the price of RON95 at RM2.05 a litre, while diesel under the subsidised diesel control system is sold at RM2.15 a litre.

Anwar also said Malaysia’s petroleum supply remained stable and sufficient despite the prolonged global energy crisis.

“The nation’s supply of petroleum remains stable and sufficient. The Madani government will continue strengthening our measures to ensure our long-term supply and maintain the targeted subsidies, even as the global crisis prolongs.

“The government’s priority is ensuring that the people are protected, especially those most vulnerable to cost pressures, while closely monitoring our fiscal position and capability to continue the subsidies,” he said.