The government expects to spend nearly RM40 billion on petroleum subsidies this year if current global oil prices persist, as geopolitical tensions and conflict in the Middle East continue to drive up crude prices, the Ministry of Finance (MOF) said.
MOF said monthly subsidies for RON95 petrol and diesel rose sharply from nearly RM800 million in January and February 2026 to around RM5 billion in March and April.
“If current market prices remain, the government is expected to bear petroleum product subsidies of almost RM40 billion for 2026,” the ministry said in a written parliamentary reply on June 30.
MOF said the higher subsidy bill enables all Malaysian citizens aged 16 and above to continue purchasing RON95 petrol at the subsidised price of RM1.99 per litre.
The ministry added that the country’s petroleum supply remains stable and sufficient despite ongoing global supply disruptions.
It also said the government will continue strengthening long-term fuel supply security measures while maintaining targeted subsidies as the global supply crisis persists.
