Malaysia’s government is prepared to spend as much as RM50 billion a year to keep the price of RON95 petrol fixed at RM1.99, Prime Minister Datuk Seri Anwar Ibrahim announced.
The commitment underscores a continued reliance on direct fiscal absorption to shield consumers from volatile global oil markets, rather than allowing domestic prices to float in line with international benchmarks.
5 billion, even when global Brent crude prices settled within the US$70 to US$90 per barrel range.
The decision maintains the status quo for fuel pricing despite the significant fiscal burden it imposes.
Previous estimates indicated that monthly fuel subsidy expenditures were already running near RM3.5 billion, even when global Brent crude prices settled within the US$70 to US$90 per barrel range.
With global oil prices rising, the annualized cost of maintaining the RM1.99 cap is projected to escalate sharply, testing the limits of the national budget.
This move comes amid ongoing tensions between the government and major oil companies regarding financial losses incurred by petrol station operators.