Malaysia keeps RM40 billion fuel subsidy commitment for 2027
The government rejected a proposal for market-rate fuel and electricity prices coupled with cash support only for poorer consumers.
Malaysia will retain its RM40 billion commitment to fuel subsidies in the 2027 Budget, Finance Minister II Datuk Seri Amir Hamzah Azizan said. He said targeted support would protect Malaysians against fluctuations in global oil prices while limiting subsidy leakage.
Speaking during the Dewan Rakyat’s committee-stage debate on the Supply Bill 2027, Amir Hamzah rejected an approach proposed by economists, including those from the International Monetary Fund and local experts. Their proposal would charge all consumers market rates for fuel and electricity, while restricting cash assistance to the poor.
He said the government’s targeted subsidies were intended to ensure assistance reached eligible beneficiaries, reduce smuggling and prevent non-citizens from receiving subsidy benefits. He also said it remained uncertain whether the Middle East conflict would ease or oil prices would stabilise in 2027.
Under Budi Madani, Malaysians could continue buying up to 300 litres of subsidised RON95 petrol at RM1.99 per litre, against a market price of RM4.42 per litre, he said. The subsidised diesel allowance was up to 400 litres at RM2.10 per litre, compared with RM5.27 per litre on the market.
Separately, Amir Hamzah said payments through Sumbangan Tunai Rahmah and Sumbangan Asas Rahmah (Sara) had reached RM12 billion by Oct 31. Nearly nine million recipients had used Sara, with transactions worth RM6.15 billion and utilisation of 99.7 per cent. Sara for All recorded transactions exceeding RM1.95 billion from 20.6 million recipients, representing 92 per cent of eligible users.
