KUALA LUMPUR, October 22 – Malaysia’s plan to phase out petrol subsidies by mid-2025 is a necessary move to ensure the country’s fiscal sustainability, despite expected public backlash, according to Economy Minister Rafizi Ramli. The proposed reform will introduce a tiered subsidy system, affecting only the top 15% of income earners while maintaining support for the remaining 85% of Malaysians, as announced in Budget 2025 by Prime Minister Datuk Seri Anwar Ibrahim.
Rafizi described the decision as “a once-in-a-generation” shift aimed at reducing the country’s budget deficit and bolstering fiscal health. While acknowledging that inflation and price hikes may follow, he emphasized the government’s commitment to managing the impact effectively, with plans to offset price hikes through targeted cash handouts for lower-income groups. Malaysia’s reliance on fuel subsidies, which cost over RM50 billion in 2023, makes this reform critical for attracting investors and sustaining long-term economic growth.
