Malaysia’s subsidies in 2022 total RM62b — nearly five times more than in 2021

Friday 22 Nov 2024

AG's Report 2022

KUALA LUMPUR (Oct 10): Putrajaya spent a total of RM62.11 billion in subsidies last year, according to the Auditor General’s Report on the federal government’s 2022 financial statement.

The bulk or RM55.443 billion in subsidies was charged to the federal government’s operating expenditure (opex), while part of the subsidy spending for petroleum products and cooking oil amounting to RM6.67 billion was charged to the Covid-19 Trust Fund.

The total amount spent on subsidies in 2022 is 4.73 times the RM13.134 billion in subsidies allocation spent by the federal government in 2021, the report showed.

Within an opex allocation of RM55.443 billion, the biggest component, at 81.5% of the total, was petroleum products subsidy of RM45.18 billion — which excludes the subsidies charged to the Covid-19 fund — as crude oil prices rose to above US$100 per barrel but Malaysia continued to cap prices at the pumps.

Meanwhile, electricity subsidy charged to opex stood at RM4 billion, paid to Tenaga Nasional Bhd as part of RM10.757 billion claimed by the utility company for the second half of 2022 period.

Subsidies for food aid and cooking oil amounted to RM2.47 billion, up 135.5% from RM1.42 billion in 2021, of which RM976.4 million was an increase for cooking oil subsidies due to the jump in crude palm oil prices.

Toll subsidies stood at RM861.22 million, down 35.5% from 2021 — a high base owing to the settlement pursuant to the removal of toll collection at Batu Tiga, Sungai Rasau and Bukit Kayu Hitam.

Malaysia has projected a total subsidy bill at around RM81 billion this year. The government is slated to share details of its planned rationalisation of subsidies for the biggest component — petrol and diesel — in the upcoming Budget 2024 this Friday (Oct 13).

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