Malaysia’s government has defied recommendations from the World Bank, opting to maintain existing fuel subsidies despite calls to align gasoline prices with current market rates. The decision,announced by Prime Minister datuk Seri Anwar Ibrahim,prioritizes affordability for citizens amid rising global energy costs and regional price discrepancies-currently,Malaysian RON 95 gasoline is priced lower than comparable fuel in neighboring Indonesia. This move underscores a commitment to the Budi Madani RON 95 subsidy program and a broader strategy of targeted financial assistance for the Malaysian populace.
Jakarta –
Malaysia’s government has rejected a World Bank proposal to align gasoline prices with market rates, opting to maintain subsidized fuel costs for its citizens. The price of RON 95 gasoline will remain at approximately 8,000 Indonesian Rupiah per liter.
Prime Minister Datuk Seri Anwar Ibrahim stated that the government remains committed to its Budi Madani RON 95 subsidy program, keeping the price of RON 95 at 1.99 ringgit per liter, equivalent to roughly $8.02 USD.
“The proposal was to increase prices to RM 2.65 (approximately $10.68 USD) per liter for all types of gasoline, and then provide subsidies to specific categories. Therefore, my cabinet colleagues and I rejected this proposal and lowered the price of RON 95 to RM 1.99 (approximately $8.02 USD) per liter for Malaysian citizens and RM 2.60 per liter for foreign nationals,” Anwar Ibrahim said.
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He explained that the Budi 95 subsidy program has successfully reduced government expenditure without placing a burden on the public.
“This demonstrates that our government’s approach is prudent and we are taking actions that benefit the people. Thankfully, the targeted RON 95 subsidy throughout Malaysia has received a very good and positive response,” Anwar stated.
“When the government ended subsidies for chicken and eggs while maintaining prices, it ensured price stability, adequate supply, and no impact on the public. The Madani government aims to target subsidies and achieve savings of approximately RM 15.5 billion per year through policies allowing chicken and egg prices to float (follow market rates), as well as targeting subsidies for electricity, diesel, and RON 95,” Anwar added.
According to Anwar Ibrahim, these targeted subsidies ensure that the majority of the population receives assistance while combating subsidy leakage to non-citizens and businesses. The move underscores the government’s commitment to fiscal responsibility while protecting consumers.
Malaysia’s subsidy program results in significantly lower RON 95 gasoline prices compared to Indonesia. Currently, RON 95 gasoline in Malaysia sells for approximately 8,000 Indonesian Rupiah per liter, which is less expensive than Pertalite, a gasoline with a RON of 90, which costs 10,000 Indonesian Rupiah per liter in Indonesia.
From September to November 30, 2025, 13.9 million out of 16.55 million eligible Malaysian residents (84%) purchased 2.59 billion liters of RON 95 gasoline at the subsidized price of RM 1.99 per liter.
(rgr/din)
