Govt triples fuel subsidies to RM2 billion to ease petrol and diesel costs (UPDATED)

THE Malaysian government has significantly increased fuel subsidies, raising allocations for petrol and diesel from RM700 million to RM2 billion as part of efforts to shield households and businesses from rising energy costs.

The nation's monthly fuel subsidy bill is expected to surge to RM3.2 billion as the government moves to shield households and businesses from rising global energy prices triggered by geopolitical tensions in West Asia.

Finance Minister II Datuk Seri Amir Hamzah Azizan said the increase reflects the government’s commitment to cushioning the public from the impact of higher fuel costs while maintaining affordability for consumers.

“The government has raised the subsidy allocation for petrol and diesel from RM700 million to RM2 billion,” he said, adding that the step is intended to ensure fuel remains affordable and to ease financial pressure on households and businesses.

Under the revised structure, subsidies for RON95 petrol under the BUDI95 initiative have risen to RM2 billion per month from RM700 million previously, while diesel subsidies have increased to RM1.2 billion monthly.

The Finance Ministry clarified that before the escalation of tensions in West Asia, the combined monthly subsidy for RON95 petrol and diesel stood at about RM700 million. The latest adjustments have pushed the total monthly subsidy to RM3.2 billion, representing an overall increase of approximately RM2.5 billion.

Amir said the government remains capable of absorbing the additional cost despite global market volatility.

“Although the MADANI Government is addressing the implications of rising global oil prices, the government will continue to ensure that the rakyat are supported and that the BUDI95 initiative can be maintained.

“This burden can still be borne by the government because we have implemented many reforms and fiscal consolidation measures over the three years of the MADANI administration,” he said during a press conference following a special Cabinet meeting today.

The meeting was convened to address economic risks arising from geopolitical tensions and the surge in global oil prices. Brent crude has climbed significantly in recent weeks, reflecting concerns over potential disruptions to supply routes in the Middle East.

Economists warn that prolonged increases in oil prices could fuel global inflation, making government intervention critical in cushioning the impact on consumers and businesses.

By substantially increasing fuel subsidies, the government aims to strike a balance between maintaining fiscal discipline and ensuring Malaysians continue to have access to reasonably priced fuel despite fluctuations in global energy markets.

At the same briefing, Communications Minister Datuk Fahmi Fadzil revealed that the government is also considering a proposal to allow civil servants to work from home as part of contingency measures related to geopolitical developments.

He said Prime Minister Datuk Seri Anwar Ibrahim had instructed Chief Secretary to the Government Tan Sri Shamsul Azri Abu Bakar and Public Service Department director-general Tan Sri Wan Ahmad Dahlan Abdul Aziz to study the proposal.

“Several options are being studied. The Prime Minister has asked the Chief Secretary to the Government and the Director-General of the Public Service Department to examine the proposal for working from home to ensure certain matters can be coordinated,” Fahmi said.

“This involves the public sector and the outcome of the discussions will be presented and decided in the Cabinet meeting, God willing, next Tuesday,” he added.

The potential work-from-home arrangement is being considered to ensure the continuity of government operations should geopolitical developments disrupt normal administrative functions. - March 13, 2026