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THE country could face nearly RM4 billion in petrol subsidy costs if the conflict in West Asia persists for two months, according to Pandan Member of Parliament Rafizi Ramli.
Rafizi said the surge in subsidy spending would place pressure on the government’s cash flow as it continues to maintain the price of RON95 petrol at RM1.99 per litre.
He noted that the government is currently paying about RM61 million each day in subsidies, equivalent to more than RM1.9 billion a month, under the BUDI MADANI RON95 programme.
“This amount must be paid to oil companies and indirectly affects the government’s cash flow.
“So, the question is, will the previous efforts to retarget subsidies ultimately become futile? If we were in the position of the Prime Minister, Datuk Seri Anwar Ibrahim, we would also hope that this war ends quickly,” he said during the Yang Berhenti Menteri (YBM) podcast with moderator Haziq Azfar Ishak last night.
Rafizi also warned that the conflict in West Asia could affect Malaysia’s currency and financial markets.
He said that although the daily lives of Malaysians have not yet been disrupted to the same extent as in some other countries, the economic impact is already beginning to surface.
“The first impact is on the currency. Previously the ringgit had been strengthening to around RM3.89 against the United States dollar.
“However, after the war broke out, that strengthening halted and the ringgit is now hovering around RM3.93 to RM3.95,” he said.
Rafizi explained that wars and global crises typically trigger volatility in financial markets, prompting investors to move their funds to safer assets.
“Usually, investors will look for the safest place to invest and the US dollar is considered the most stable. That is why, after the war broke out, the dollar strengthened again after several weeks of weakness,” he said.
He cautioned that if the conflict continues, Malaysia could face broader economic consequences including higher oil prices, rising inflation and a widening fiscal deficit.
“Although these factors are beyond the government’s control, public perception usually still links economic performance to the current administration.
“When the economy is doing well, the government will take the credit. So when conditions become difficult, the government must also face the consequences,” he said.
Rafizi added that any increase in fuel prices could also carry political implications, including influencing decisions on when to hold the next general election.
He said that raising petrol prices could make it more difficult for the government to call for polls in the near term. - March 14, 2026
