10th April 2026 - 2 min read
Malaysia’s RON95 fuel subsidy bill has jumped from RM700 million a month in January 2026 to RM4 billion in April, driven by Brent crude surpassing US$100 per barrel, well above the US$65 assumption in Budget 2026.
At a briefing on Part 1 of the April 2026 Malaysia Economic Monitor report on 9 April, World Bank lead economist for Malaysia Apurva Sanghi suggested the government could consider raising the subsidised RON95 price from RM1.99 back to RM2.05, the rate before the Budi95 scheme brought it down in September 2025.
The government has already responded by cutting the monthly subsidised fuel quota under Budi95 from 300 litres to 200 litres per person. Sanghi described this as a step in the right direction, but noted that fuel subsidies remain regressive, with the top 10% and top 20% of earners consuming disproportionately more than 200 litres a month.
He also pointed to the option of adjusting prices as a complementary tool, particularly given the ongoing Middle East conflict. “If the situation continues to worsen, there has to be some adjustment,” he said.
Moving from RM1.99 to RM2.05 adds six sen per litre, working out to around RM12 extra on a full 200-litre monthly quota. For most drivers, the direct impact on their fuel bill would be modest.
Sanghi also cautioned against broad fiscal stimulus in the current environment, noting that Malaysia is in a period of relatively steady growth and contained inflation. He said stimulus measures risk adding to inflationary pressures rather than relieving them.
Sanghi noted that the effects of high oil prices extend beyond fuel costs. “This is not just an oil crisis anymore. It spills over to food, fertilisers, refined products, and so forth,” he said at the briefing. Higher logistics and transport costs can feed into the prices of everyday goods over time, independent of what happens at the pump.
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Iman writes about personal finance with curiosity. She is interested in the stories behind money, the hesitation around big decisions, and the small habits that shape financial futures. Off the clock, she is either dissecting a film or climbing her way up the leaderboard in her favourite games.
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