SHAH ALAM – Fuel subsidies meant to ease the burden on Malaysians are still benefiting the wealthy, raising concerns over fairness and missed opportunities for reform.
Setiawangsa MP Nik Nazmi Nik Ahmad said while the government has taken steps to rationalise subsidies, more targeted measures were needed to ensure they reach those who needed them most.
“I think, to be fair, the government is trying its best under the current circumstances. But one of the things is that we missed the opportunity to do more in terms of fuel reform,” he said.
Malaysia has long relied on fuel subsidies to keep prices affordable, but critics argued that the current structure allowed higher-income groups to benefit disproportionately despite having the means to pay market rates.
Nik Nazmi pointed out that although the subsidy has been capped at 200 litres, high-income earners were still enjoying subsidised fuel.
“Although the subsidy has been reduced to 200 litres, the rich are still receiving it and to me, that is unfair,” he said.
He said removing subsidies for the wealthiest groups could encourage more responsible fuel consumption and accelerate the shift towards cleaner alternatives.
“If you remove subsidies from the very rich, it would push them towards using EVs. Right now, people are still making unnecessary journeys because fuel is relatively cheap,” he added.
Nik Nazmi stressed that subsidies should remain for ordinary Malaysians, but not for those who can afford to pay full price.
“For ordinary Malaysians, it’s fine, but the richest should pay the market rate. If it’s RM5 or RM6 per litre, then they should pay that,” he said.
He also highlighted how fuel pricing can influence behaviour, citing examples from other countries.
For example, he said in Manila, the roads are less congested because fuel prices are higher. He said people either switch to EVs or use public transport.
Beyond immediate reforms, Nik Nazmi said Malaysia must accelerate its long-term energy transition to reduce exposure to global price volatility.
“Prices fluctuate depending on global events, especially in West Asia, which is quite unstable at the moment. We need to gradually decouple from that,” he said.
He added that diversifying energy sources, including renewables and alternative energy options, would be key to strengthening the country’s energy security.
The government recently announced a temporary adjustment to the monthly purchase limit for subsidised RON95 petrol under the Budi Madani programme, reducing it to 200 litres from 300 litres previously, effective April 1.
Prime Minister Datuk Seri Anwar Ibrahim said the subsidised price of RM1.99 per litre would remain unchanged despite ongoing global uncertainties, including tensions in West Asia.
The government has also maintained the 800-litre monthly fuel quota for e-hailing drivers and is exploring flexible working arrangements, including work-from-home options for civil servants, to help reduce fuel consumption.
In a special address on March 26, Anwar said the measures would be implemented in phases and on a selective basis, while encouraging the private sector to adopt similar practices to cushion the impact of global oil supply disruptions.