Presently, what the government is doing, reducing the availability of RON95 from the initial 300 litres to the present 150 litres and floating the idea of removing it completely for the T20 group is akin to a strip tease with the ordinary rakyat.
Can you, in all honesty, say that the government can responsibly continue to promise fuel subsidies for many more years to come?
Fuel subsidies are, whether you agree or not, a form of “unproductive” spending.
It is distortionary and fiscally wasteful.
Artificially suppressed fuel prices distort demand, delay the shift to cleaner transport,
Disproportionately benefit the wealthy because they drive more?
That is subjective.
You are definitely aware or have been briefed by your advisors as to what is the fiscal reality.
None of this is free.
Malaysia’s combined RON95 and diesel subsidy bill has risen around 10 fold within 3 months, from about RM700 million a month in January 2026 to around RM7 billion in April 2026.
At that run-rate, fuel subsidies alone could consume about RM45 billion-RM55 billion a year, which would more than exhaust the RM49 billion set aside in Budget 2026 for subsidies and social assistance, considering part of that allocation includes the RM15 billion committed to STR and SARA cash transfers.
For perspective, Budget 2026 allocated RM66.2 billion to the Ministry of Education and RM46.5 billion to the Ministry of Health.
Fuel subsidies are vital policy tools in many developing, oil-rich economies and Malaysia is no exception.
These subsidies lower the net amount paid by consumers or raise the effective price received by energy producers.
In Malaysia, fuel consumption subsidies are provided for petrol and diesel to reduce the cost of living for vulnerable households and promote industrial productivity.
Over the years, these subsidies have helped the government manage the adverse effects of economic shocks emanating from the COVID-19 pandemic and the energy crises precipitated by the Russian-Ukraine war.
However, as the country transitions to a high-income economy with the attendant increase in fuel consumption, the economic costs of fuel subsidies begin to outweigh their benefit, a matter that was highlighted and raised publicly by Bank Negara.
The subsidy burden is enormous and every additional ringgit spent cushioning fuel prices represents a lost opportunity elsewhere, implying painful fiscal trade-offs.
You acted on the most immediate and least disruptive measures, the “low hanging fruit”.
Reducing the monthly quota from 300 litres to 200 litres and possibly reduced further in the future.
Encouraging work from home arrangements.
Stepping up enforcement against misuse and smuggling can all help contain consumption. Instructions for ministries to cut non-essential operating expenditure also create some fiscal breathing room.
Instead of all these band aid type of solutions, you know that accelerating structural change is the only durable solution for the long term.
The National Energy Transition Roadmap (NETR) outlines a path through renewable energy expansion, electric vehicles (EV) and biofuel blends.
Speeding up such measures will shrink future subsidy needs, strengthen energy security and align with our climate commitments.
Every ringgit invested today in solar capacity, public transport and EV infrastructure is a hedge against the next Strait of Hormuz moment.
The revision by MITI on EV car come 1 July 2026 is akin to throwing sand into a ricebowl.
The ordinary rakyat are now asking, why bother with the NETR?
Is the government sincere and fully committed to that roadmap set up and agreed by the Madani Cabinet?
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