Targeted subsidy doesn't increase national debt, savings up to RM4 bil per year — MOF
By Bernama
05 Dec 2025, 12:56 am

KUALA LUMPUR (Dec 4): The implementation of targeted subsidy does not increase national debt, but rather an important strategy to reduce long-term liabilities, stabilise the fiscal position and strengthen investor confidence in Malaysia’s economic prospects.

The Ministry of Finance (MOF) said savings from this targeted subsidy will be used for the well-being of the people and funding the development of educational, health and public transport facilities in the country.

RON95 petrol subsidy rationalisation is one of the government's initiatives to help ease the burden on the people as well as increase the efficiency of spending and distribution of the country's financial resources, the ministry said in a reply to the Dewan Rakyat posted on the parliament website on Thursday.

According to the MOF, the government is expected to generate savings of RM2.5 billion to RM4 billion per year based on domestic consumption data and the assumption that around 20 per cent of the total RON95 consumption currently involves consumers who are not eligible for subsidies.

“The range of savings takes into account various scenarios of global crude oil prices between US$60 and US$80 per barrel, as well as the implementation of subsidy removal on non-targeted segments such as foreigners and commercial consumers,” the ministry said.

The ministry added that the targeted subsidy approach has the advantage of not causing a sharp increase in inflation compared to raising the price of RON95 to the market price for all, with inflation expected to remain below two per cent for 2025 and 2026.

“It also helps accommodate different levels of RON95 usage among citizens with different daily travel distances,” said the MOF.

The ministry said the government is committed to adopting a prudent and responsible fiscal approach, with targeted subsidy seen as able to strengthen the country's fiscal position without increasing debt and ensuring that benefits are channelled more effectively.

The MOF said this in response to a question from Datuk Seri Mohd Rafizi Ramli (PH-Pandan) who wanted to know the estimated cost savings and annual implementation expenses for 2025, 2026 and 2027 for the RON95 subsidy programme and how the savings will be utilised and which allocations will be increased using the savings as well as the percentage of improvement in the country's fiscal deficit.

Source: https://theedgemalaysia.com/node/784886

wasnt rafizi said the saving is insignificant?

Where/when did he ever said that?

The initial savings was supposedly to be 7-8 billions, if not mistaken. 😈

his own podcast.
anyway he try to say that masuk duit dalam akaun is better approach. but then again there are people like me or many motorist out there dont even use most of the petrol subsidy allocation, so if give money, they just pocket the money not use to buy petrol instead.

This post has been edited by zerorating: Dec 5 2025, 12:54 PM

if he is referring to the savings going into cover/paying the debt of 1mdb interest

This post has been edited by Jenn77: Dec 5 2025, 12:54 PM

he just said current approach is just same as blanket subsidy, we will pay more for the implementation.

ice vehicle burning so much money... subsidy for ron95 alone already over 10bil each year, for comparison, penang lrt is only around this price

now imagine if we use the money for subsidy into public transport like lrt and buses, then make city more walkable, 20 years later every state will have lrt running

rakyat no need to spend their one or few years salary to buy car and die in road accident everyday, rakyat will also be more healthy with more walking

it will save near 7 B when T10 kena if/when they proceed the next stage right ?

Which episode?

lazy to search.

How convenient

Kesian border smugglers susah cari makan.

got work to do

Spin, spin and spin.

There is always reason for they want to do.


This post has been edited by icemanfx: Dec 5 2025, 01:22 PM

How would targeted subsidy increase national debt?

Means you have no financial sense.

Just look at /k when you ask them to walk. All kinds of excuses, as if it is never hot in Singapore, never hazy in Hong Kong, never crowded in Bangkok (to name but 3 walkable places)

if they tax sugar can get extra rm500mil to 1 billion

I asked 'how', not 'what'