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THE government’s move to bar foreigners from purchasing subsidised essentials such as packet cooking oil and RON95 petrol is being hailed as a significant step in tightening the country’s fiscal management.
Professor Emeritus Dr Barjoyai Bardai of Universiti Sains and Teknologi Malaysia estimates that the measure could generate annual savings of between RM10 billion and RM12 billion, substantially reducing long-standing leakages in the subsidy system.
“Although the savings from banning foreigners from buying subsidised cooking oil alone are estimated at around RM2 billion, this step is crucial in addressing weaknesses in the existing subsidy controls,” he said.
For years, subsidies intended to ease the cost of living for Malaysians have also benefited foreign nationals, often through smuggling activities to neighbouring countries.
The largest potential savings, Dr Barjoyai noted, are expected to come from rationalising RON95 petrol subsidies, which have historically imposed a heavy fiscal burden on the government.
In a context where the national economy faces rising living costs and the urgent need to restructure public expenditure, the decision signals a firmer approach to ensuring that subsidies are targeted at those who genuinely qualify.
The move also aligns with principles of social equity, preventing state resources from being diverted to non-contributors to the national tax system.
However, the success of the policy will depend on effective enforcement at the retail level, supported by a transparent identification system that does not unduly burden citizens.
Dr Barjoyai warned that poor implementation could create unintended consequences, including black-market activity or exploitation by unscrupulous parties.
From a public policy perspective, the billions in potential savings open the door for the government to enhance targeted assistance for Malaysians, whether through increased cash aid, improved public services, or investment in education and healthcare.
If executed consistently and transparently, this initiative could mark the first step towards more sustainable subsidy reform, reducing waste and reinforcing public confidence in the government’s commitment to prudent fiscal management. - February 2, 2026
