By Media Selangor Team
SHAH ALAM, July 10 — The federal government is expected to spend nearly RM40 billion on petroleum subsidies in 2026 if current market oil prices remain unchanged, Prime Minister Datuk Seri Anwar Ibrahim said.
Anwar, who is also finance minister, said the government spent almost RM800 million a month on RON95 and diesel subsidies in January and February before the figure surged to around RM5 billion a month in March and April.
Subsidy expenditure then moderated to around RM4 billion a month in May and June, he said.
“Fuel prices have continued to moderate in July, and if current market prices remain, the government is expected to bear close to RM40 billion in petroleum product subsidies for 2026,” he said in a parliamentary written reply yesterday.
He was responding to a question from Menteri Besar and Gombak MP Dato’ Seri Amirudin Shari on the government’s total expenditure on BUDI95 and other subsidies since February 2026 to ease the people’s burden.
Amirudin also sought details on plans being formulated under Budget 2027 to ensure the government can continue assisting those in need.
Anwar said the increase in subsidy spending allows Malaysians to continue purchasing RON95 petrol at the subsidised price of RM1.99 per litre.
He said government subsidies also extend to critical and strategic sectors, including subsidised diesel at RM1.65 per litre for fishermen.
Anwar added that cash assistance under BUDI Agri-Komoditi had been temporarily increased from RM200 to RM400 a month to ease the burden on more than 210,000 farmers and smallholders in Peninsular Malaysia following higher global oil prices driven by geopolitical tensions and the conflict in West Asia.
He said the government had also introduced the Subsidised Diesel Control System (SKDS), which provides diesel at RM1.88 per litre for public transport operators, including school and express bus services, while extending the subsidy to eligible logistics and goods transport operators in Sabah and Sarawak at RM2.15 per litre.
“The country’s petroleum supply currently remains stable and sufficient, with supply planning having been arranged to ensure continuity of supply in the coming period.
“At the same time, the Madani government continues to strengthen long-term supply security measures and targeted subsidies while the global supply crisis persists.”
On Budget 2027, Anwar said the government would prioritise sustainable and inclusive economic growth centred on people’s well-being, in line with the Madani Economy framework.
“The government will ensure that every fiscal policy and public expenditure not only supports economic growth, but also improves the standard of living of the people comprehensively.
“Key priorities include strengthening social protection and targeted assistance, continuing phased and targeted subsidy reforms, increasing incomes and social mobility, enhancing basic public services, reinforcing fiscal sustainability, and accelerating digitalisation, artificial intelligence (AI) adoption and integrated data use.”
