Malaysia Budgets Fuel Subsidy of Up to 8.67 Trillion Rupiah to Maintain Purchasing Power
KUALA LUMPUR — Malaysia’s government has increased spending on fuel subsidies for RON95 petrol in order to maintain stable selling prices amid rising global oil prices.
This policy was implemented by raising the allocation for fuel subsidies to 2 billion ringgit, or approximately 8.67 trillion rupiah (based on an exchange rate of 4,337 rupiah per ringgit), up from the previous 700 million ringgit.
The measure was taken to maintain RON95 petrol prices, which are widely used by the public, at 1.99 ringgit per litre, or approximately 8,632 rupiah per litre. Malaysia’s government considers fuel price stability to be important for maintaining public purchasing power whilst avoiding broader inflationary impacts.
Malaysia’s Ministry of Finance confirmed that the government will maintain a targeted subsidy policy for fuel, including ensuring RON95 prices remain at 1.99 ringgit per litre. Additionally, the Malaysian government will continue to maintain subsidised diesel prices for public land transport and cargo logistics on Peninsular Malaysia at 1.88 ringgit per litre (approximately 8,155 rupiah) and 2.15 ringgit per litre (approximately 9,326 rupiah), respectively.
Assistance has been increased to 300 ringgit, or approximately 1.30 million rupiah, from the previous 200 ringgit. “The additional payment of 100 ringgit will be made starting 17 March 2026,” the Malaysian Ministry of Finance stated.
The government considers targeted subsidy policy to be an important approach to balance consumer protection with the country’s fiscal responsibility. The Malaysian Ministry of Finance stated that law enforcement efforts will be strengthened to curb leakage and prevent misuse of subsidised fuel, as fuel prices in Malaysia remain relatively lower than in neighbouring countries.
“At the same time, law enforcement efforts will be strengthened to prevent leakage and misuse of subsidised fuel, as fuel prices in Malaysia remain lower than those in neighbouring countries,” the ministry stated.
This measure is also part of the government’s long-term strategy to ensure subsidies are better targeted and do not unduly burden the national budget.