KUALA LUMPUR – Malaysia’s monthly petroleum subsidy bill fell to about RM3 billion between June and August, from a peak of nearly RM5 billion in March and April, but the government still expects its annual fuel subsidy expenditure to reach RM40 billion.
The Finance Ministry said the subsidy burden had risen sharply amid higher global crude oil prices following the conflict in the Middle East, putting pressure on government finances.
“The government has faced significant fiscal pressure as the global supply crisis has led to higher subsidy expenditure, particularly for fuel and utilities.
“The conflict in the Middle East pushed global crude oil prices above US$120 per barrel, and Malaysia has not been spared the effects of this crisis,” the ministry said in a written parliamentary reply on Thursday (Oct 29).
Datuk Seri Mohd Shafie Apdal (Warisan-Semporna) had asked for the total petroleum subsidy expenditure as of September, as well as a breakdown of spending cuts introduced by individual ministries to accommodate the rising subsidy burden.
However, the written reply did not state the cumulative subsidy expenditure up to September or identify the spending reductions made by individual ministries.
Instead, the ministry said the government had reprioritised its annual expenditure to focus on programmes that would deliver the greatest benefits to the public and the economy.
It said this took into account each ministry’s operational requirements and priorities, while protecting high-impact programmes and essential services such as education, healthcare and public assistance.
The ministry added that the government would continue balancing efforts to shield Malaysians from higher fuel prices with prudent spending to ensure the subsidy burden did not undermine fiscal sustainability. –THE STAR