The government spends RM3.4 billion annually on LPG subsidies. With a population of around 36 million, that’s approximately:
RM3.4 billion ÷ 36 million = RM94.45 per Malaysian per year
Apply some logic:
After removing the subsidy, will the average person end up paying more or less?
If the average Malaysian ends up paying more than RM94.45 annually due to inflation or price hikes, then removing the subsidy achieves the opposite of its intent—especially for B40 and M40 groups, many of whom rely on outside food because cooking isn't economical for single or dual-income households.
Let’s run the numbers:
If the cost of a meal increases by RM1 per plate:
2 meals/day × RM1 = RM2/day
RM2 × 30 days = RM60/month
RM60 × 12 months = RM720/year
Of course, not everyone eats out every day. Assume 30% of the population eat outside.
0.3 × RM720 = RM216/year
Clearly, with a RM1.00 hike, a person could end up paying almost 2 x more than what they "gained" from the subsidy cut (RM216 vs RM94.45).
So the key question becomes:
Does this subsidy removal really reduce government spending, or does it merely shift the burden to the people without net savings?
If it’s merely a transfer mechanism—removing RM3.4B from public subsidy but forcing civilians to pay RM7.7B in cost increases—then it’s not cost-effective. In fact, it's economically regressive.
Eateries barred from use household subsidised gas
May 27 2025, 08:13 PM
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