THE Madani Government is spending between RM40 billion and RM50 billion annually to keep RON95 petrol prices at RM1.99 per litre, Prime Minister Datuk Seri Anwar Ibrahim said.
Speaking at the National Training Week (NTW) 2026 programme in Seberang Perai today, Anwar said the retail price did not reflect the actual market cost, with the government absorbing the difference to shield consumers from the impact of global price increases.
"RON95 is not actually priced at RM1.99; the government pays the difference," he said.
Anwar said international fuel prices had been affected by geopolitical tensions, including conflicts in the Middle East and concerns over possible disruptions to the Strait of Hormuz, which had also driven up the costs of fertiliser and imported goods.
While national oil company Petronas supplies around half of Malaysia’s fuel requirements, the country relies on imports for the remaining demand, leaving domestic prices exposed to fluctuations in global markets.
He said Malaysia continued to provide significant petrol and diesel subsidies compared with neighbouring countries, where consumers face considerably higher fuel prices.
Beyond fuel subsidies, Anwar highlighted other major government commitments to ease the cost of living, including RM15 billion to RM16 billion annually for cash assistance programmes under Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara).
He also cited the RM18 billion annual allocation for the civil service salary adjustment, the first major review in 12 years, which provides higher percentage increases for lower-income government employees.
Malaysia introduced a targeted RON95 subsidy mechanism on 30 September last year, allowing eligible citizens to purchase subsidised fuel within a monthly quota.
Anwar urged Malaysians to consider the scale of government expenditure before accepting criticism from political opponents, stressing that the administration remained committed to safeguarding the rakyat while implementing economic reforms and strengthening fiscal management. - July 25, 2026
