KUALA LUMPUR (June 25): Malaysia has spent RM11.2 billion subsidising the widely used RON95 petrol over eight months since the roll-out of its targeted subsidy approach.

The Ministry of Finance said fuel consumption among about 14 million eligible citizens has reached a total of 11.1 billion litres as of end-May this year.

“Sales were valued at approximately RM22.1 billion. Of that amount, RM11.2 billion was borne by the government as fuel subsidies,” the ministry said in a parliamentary reply.

Malaysia rolled out the targeted fuel subsidy programme on Sept 30 last year, under which eligible citizens with a valid driving licence pay RM1.99 per litre, subject to a monthly subsidised fuel cap of 300 litres per person.

The cap was later reduced to 200 litres from April this year following the outbreak of conflict involving the US and Iran, which pushed Brent crude prices above US$100 per barrel.

An exception is provided for e-hailing and gig workers, who are eligible for up to 800 litres per month.

The Ministry of Finance noted that the subsidy bill for RON95 and diesel rose more than 10-fold to RM7.5 billion in April from RM700 million in January, following tensions in West Asia.

Although Brent crude prices have since eased to below US$100 per barrel, the ministry said current subsidy obligations based on prevailing market prices remain elevated at an estimated RM3.5 billion per month.

Of this amount, RON95 subsidies are projected at about RM2 billion per month, while diesel subsidies account for around RM1.5 billion.

The ministry said it has reorganised its annual spending priorities to accommodate higher subsidy expenditure, focusing on high-impact programmes for the rakyat and the economy.

At the same time, fiscal discipline is being strengthened through tighte control of operating expenditure, improved public spending efficiency, and efforts to reduce leakages in programme and subsidy implementation, it added.

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