This article first appeared in The Edge Malaysia Weekly on October 12, 2026 - October 18, 2026

The federal government’s non-tax revenue is projected to reach RM83.7 billion in 2027, driven by investment income and non-revenue receipts, according to the Fiscal Outlook and Federal Government Revenue Estimates.

The bulk of it will come from Petroliam Nasional Bhd (PETRONAS). The national oil company is expected to contribute RM32 billion, alongside RM7 billion from Bank Negara Malaysia and RM3 billion from Khazanah Nasional Bhd.

Of the RM32 billion, it is unclear how much will come from dividends and how much will comprise non-cash items.

Meanwhile, for 2026, PETRONAS’ dividend payment will be increased to RM27 billion from the originally budgeted RM20 billion. However, the revised amount remains below the RM32 billion contributed in both 2024 and 2025.

For the federal government to navigate the domestic economy amid the adverse impacts brought about by higher crude oil prices is understandably a challenging task.

The government’s petrol subsidy bill swelled to RM40 billion this year. Some argue that the fuel subsidy is necessary to contain inflation and that PETRONAS is making higher profits, while others are of the view that fiscal discipline should prevail.

It is good that the country has a national oil firm to count on during challenging times. That said, the federal government must recognise that PETRONAS needs to reinvest for growth. This is important, so that when the next critical moment emerges, it remains in a strong position to cushion the adverse impacts.

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