Petroleum subsidies projected to hit RM40bil this year

KUALA LUMPUR: The government's petroleum subsidy bill is projected to reach RM40 billion this year as a global supply crisis pushes crude oil prices above US$120 per barrel.

Prime Minister Datuk Seri Anwar Ibrahim said monthly subsidies for petrol, diesel and liquefied petroleum gas (LPG) surged from about RM800 million in January and February to nearly RM5 billion in March and April.

However, the monthly subsidy burden eased to about RM3 billion between June and August.

Anwar, who is also finance minister, said the government had adopted a balanced approach to protect Malaysians from rising fuel prices while safeguarding the country's fiscal sustainability.

"The government has reprioritised its annual expenditure to focus on programmes that deliver the greatest impact to the people and the economy.

"This exercise takes into account the operational needs and priorities of each ministry, particularly to ensure that high-impact programmes and essential services, including education, healthcare and financial assistance, remain protected," he said in a written parliamentary reply.

He was responding to Datuk Seri Mohd Shafie Apdal (Warisan-Semporna), who sought details on petroleum subsidies.

Anwar said the government would strengthen fiscal discipline by tightening operating expenditure, improving public spending efficiency and reducing leakages in the implementation of programmes and subsidies.

"Enforcement activities have also been stepped up to ensure government assistance and subsidies reach those who are genuinely eligible, thereby optimising the use of public funds.

"The government will continue to balance the need to protect Malaysians from rising fuel prices with prudent expenditure management to ensure higher subsidy costs can be absorbed without compromising the country's fiscal sustainability," he added.