SHAH ALAM, March 13 — The government will continue to subsidise RON95 petrol to ease the cost of living, even as the move is expected to nearly triple fuel subsidy spending.
Finance Minister II Datuk Seri Amir Hamzah Azizan said the increase in global oil prices amid the ongoing West Asia conflict is projected to push the government’s subsidy spending to RM2 billion, up from RM700 million previously.
The diesel subsidy has also risen to RM1.2 billion per month, bringing the total to RM3.2 billion.
Despite this, the government is still able to bear the burden, thanks to fiscal reforms and consolidation implemented over the past three years.
"However, it is important to remember that the conflict may last for some time, so it is crucial to consider what steps we can take going forward to reduce the burden," he said during a media conference after a special Cabinet meeting chaired by Prime Minister Datuk Seri Anwar Ibrahim today.
The West Asia conflict, now in its second week, has disrupted global supply chains and pushed crude oil prices from around US$60 per barrel to over US$100 per barrel.
Amir added that Malaysia has not faced supply disruptions like those in some other countries, thanks to a reliable supply of oil and gas.
“We carry out domestic exploration and produce oil locally. Our refinery capacity, coupled with local production, helps ensure a steady supply, while storage and distribution across the country remain stable,” he said.
Companies such as Petronas will continue to explore new sources of supply to ensure that the existing oil reserves last beyond the current May projection.
When asked if the government will continue subsidising fuel if the situation persists, the minister said: "We may then have to look at other approaches. For now, we do not know how long the conflict will last."
Amir noted that the government will also assess the impact of the conflict on the economy, as last year's strong economic performance helped Malaysia weather the crisis better.
However, preventive measures are necessary to further strengthen the economy, including continued efforts to boost domestic investment.
"Other efforts will include boosting small-scale projects to support local businesses and ensure business stability, and attracting more foreign direct investment.
"Amid the global instability, Malaysia can showcase its strengths. Foreign investors see Malaysia as a safe, stable, and promising country.
“InsyaAllah (God willing), these advantages will allow us to continue growing,” he said.
