It has not even been a month since the war in Iran began, yet the scramble for government subsidies has already started. As fuel prices surge, industries across Malaysia are beginning to show signs of strain—and many are already lining up for help.
The tourism industry was among the first to sound the alarm. Tour operators report that fuel costs have jumped by as much as 35% to 38%, with a single tank for a tour bus rising from RM747 to RM969. Having already committed to fixed contracts, many say they are now absorbing losses and warn that prices may have to rise by at least 30% if no assistance is provided. With Visit Malaysia 2026 on the horizon, they argue that government intervention is critical to prevent disruption to the tourism supply chain.
But tourism is only the beginning.
The food manufacturing sector has now joined the race. Industry players say many companies—especially SMEs—are operating on razor-thin margins and are struggling to remain profitable. According to Malaysian Food Manufacturers Association president Ding Hong Sing, some manufacturers are enduring additional RM60,000 to RM100,000 in monthly operating costs due to higher diesel prices and logistics expenses. On top of that, packaging costs—derived from petroleum—have surged by more than 100% in some cases, while global supply chain disruptions have driven shipping costs as high as RM4,000 per container. For many, the question is no longer about profits, but survival.
Then comes the glove industry, once a pillar of Malaysia’s export strength. Today, it too is under pressure. The disruption of shipping routes and constraints in the supply of nitrile butadiene rubber (NBR)—a petroleum-based raw material—have driven up costs and threatened production. With Malaysia supplying about 45% of the world’s rubber gloves, prolonged disruption could have global consequences. Industry players are now calling for government relief, including flexibility in gas supply contracts and prioritisation of raw material access.
In short, the race for subsidies has begun in earnest.
The government, however, is already signalling limits to what it can do—and recent policy moves make that unmistakably clear. While it continues to maintain the subsidised RON95 price at RM1.99 per litre, it has reduced the BUDI95 monthly quota from 300 litres to 200 litres as an interim measure in response to rising global oil prices. The message is subtle but significant: subsidies will remain, but they will not remain untouched.
Prime Minister Anwar Ibrahim has emphasised that this adjustment is temporary, noting that nearly 90% of users consume less than 200 litres a month and will not be affected. But he has also acknowledged the pressures the government is facing, making clear that such measures are necessary in light of global conditions.
Those pressures are immense. According to the Ministry of Finance, fuel subsidies under the BUDI95 and BUDI Diesel programmes have surged dramatically—from about RM700 million in January to as much as RM4 billion a month today, driven by crude oil prices exceeding USD100 per barrel. What was once manageable is now rapidly becoming a fiscal burden of staggering proportions.
Despite assurances that supply remains under control for now, the government has made it clear it cannot take a wait-and-see approach. It is already tightening eligibility, reducing quotas, and stepping up enforcement to prevent leakages and misuse. In other words, even as industries plead for help, the government is quietly preparing for a scenario where it cannot help everyone.
All this is unfolding against a backdrop of deep uncertainty. If the conflict escalates further—especially with disruptions around critical routes like the Strait of Hormuz—oil prices could climb even higher, compounding the crisis.
For now, countries can rely on strategic reserves to cushion the blow. But if industries are already waving the white flag while these buffers are still in place, what happens when those reserves begin to run out?
It is unlikely that tourism, food manufacturing, and glove production will be the last sectors to seek help. On the contrary, they are probably just the first. As costs continue to rise, more industries will inevitably join the queue. And if subsidies are seen as limited and uncertain, the rush will only intensify—no one will want to be the last to ask. What if the government decides to help on a first come, first serve basis? Or what if the goverment decides to help based on who is suffering more? If that is what the industries are thinking, then expect all of them to enter join in the race to be the first in the queue with the most pitiful and heart-wrenching story.
Behind these pleas, let us also not forget, lies an unspoken threat. If support does not come, companies may be forced to scale down operations, lay off workers, or pass costs on to consumers. In turn, government tax revenues could suffer, compounding the fiscal strain.
Soon, the government may be forced into making difficult choices—deciding who to support, who to prioritise, and who to leave behind. It is a political and economic dilemma with no easy answers.
For now, one can only hope that the war in Iran ends before Malaysia is forced to confront that reality.
TheRealNehruism (nehru.sathiamoorthy@gmail.com) is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!
The User Content (as defined on Newswav Terms of Use) above including the views expressed and media (pictures, videos, citations etc) were submitted & posted by the author. Newswav is solely an aggregation platform that hosts the User Content. If you have any questions about the content, copyright or other issues of the work, please contact creator@newswav.com.
