MONEY MASTER

Malaysia’s latest diesel subsidy reform is unlikely to become an inflation story. Instead, it is shaping up to be a fiscal management story. Under the expanded Budi Madani Diesel programme, eligible vehicle owners will continue to receive subsidised diesel through a targeted mechanism, while logistics operators under the SKDS scheme remain protected. As a result, the reform is designed to improve subsidy efficiency without creating a significant shock to transportation costs or consumer prices. Why Inflation Risks Remain Limited The market's biggest concern whenever fuel subsidies are adjusted is inflation. However, several factors suggest the impact should remain contained: Diesel accounts for only 0.2% of Malaysia’s CPI basket , limiting its direct influence on headline inflation. Logistics operators remain protected under SKDS , helping to prevent higher transportation costs from being passed on to consumers. Food, retail and service sectors are less likely to experience signifi...

Prime Minister Datuk Seri Anwar Ibrahim has assured Malaysians that  the country’s petroleum product supplies are secured at least until May 2026 , despite heightened Middle East tensions and volatile oil prices. The government is moving swiftly to safeguard fiscal stability and prevent supply disruptions as global crude markets remain unstable. Key Takeaways Petroleum supplies secured until May 2026 RON95 petrol price maintained at RM1.99 per litre Special Cabinet meeting set to review fiscal position Government to cut discretionary spending immediately Daily monitoring panel established to track Middle East developments Supply Situation Under Control Following sharp swings in oil prices after US-Israel strikes on Iran disrupted shipping through the Strait of Hormuz, the government confirmed that fuel supplies remain stable. According to Moody’s Ratings: Malaysia imports roughly 25% of its crude oil needs Despite this exposure, supply buffers are in place. The government will cont...

Quick Summary New RON95 enforcement rules take effect April 1 Both petrol station operators and buyers can be charged  for illegal use Foreign-registered vehicles banned from purchasing RON95 Industry players back tougher, more balanced enforcement What’s Changing on April 1 The government will expand enforcement powers under the  Control of Supplies Act  to curb abuse of  subsidised RON95 petrol , allowing action against  both sellers and buyers  involved in illegal transactions. Previously, enforcement focused mainly on petrol station operators. The updated guideline now includes: Owners and users of foreign-registered vehicles Individuals attempting to  misrepresent vehicles or conceal number plates Government: Fair and Balanced Approach Domestic Trade and Cost of Living Minister  Armizan Mohd Ali  said the new rules are designed to  plug subsidy leakages  while ensuring fairness. Key point: Foreign-registered vehicles are  ...

The  Ministry of Finance (MOF)  announced that the  Budi95 targeted fuel subsidy  has been extended to  boat users in Sarawak , following its rollout to Sabah fishermen last week. Under the latest expansion, over  1,400 registered private boat users  in Sarawak are now eligible for Budi95, based on data from the  Sarawak Rivers Board  and state agencies. At the same time, the  monthly fuel ceiling for full-time e-hailing drivers  has been  doubled from 300 to 600 litres , benefiting  more than 53,900 drivers  nationwide. Launched in late September,  Budi95  enables eligible Malaysians to purchase  RON95 petrol at RM1.99 per litre , capped at 300 litres per month, as part of the government’s  subsidy rationalisation initiative . The programme has since expanded to cover fishermen, private boat owners, and e-hailing drivers with higher quotas. The MOF said over  16 million Malaysians  are n...

Forecast Cut on Softer Price Trends CGS International has revised Malaysia’s  2025 inflation forecast to 1.6% , down from its earlier 2% projection. The adjustment follows August’s  1.3% year-on-year CPI increase , which was in line with expectations. Limited Impact from Fuel Price Adjustment The brokerage expects muted price pressure from the  RON95 fuel price adjustment effective September 30 , given the generous  300-litre monthly quota per consumer . While this limits the inflation impact for households, CGS noted that  businesses and high-volume fuel users may face higher costs  if excluded from subsidy reforms. The firm estimates that partial fuel-cost pass-through could add  5–10 basis points to the CPI in October . Consumer Offset Expected On the upside, consumers benefiting from the new  RON95 pump price of RM1.99 per litre  could provide a larger offset, easing overall inflationary pressures. CGS highlighted that this downward effec...

Finance Minister II Datuk Seri Amir Hamzah Azizan stated that the top 15% (T15) income group , who will be excluded from the targeted RON95 petrol subsidy, will be determined by more than just the Household Income Survey . This approach will ensure that those in genuine need, including the middle class , are not left out amid rising living costs. Speaking in the Dewan Rakyat , Amir mentioned that the Ministry of Finance is considering a tiered pricing mechanism for RON95 subsidies, similar to the models for diesel and electricity subsidies. The potential use of MyKad and e-wallets as mechanisms for subsidy delivery is also under review. Amir highlighted the success of the targeted diesel subsidy , which saved RM600 million monthly by reducing retail diesel sales by 25% and increasing commercial sales by nearly 50%.

If you are following, the Malaysian Prime Minister, Datuk Seri Najib Tun Razak has announced the increase of petrol price.  Price for RON95 petrol and diesel will be raised by 20 sen per liter from midnight. While 20 sen probably doesn't send an alarming response, an increase of 10% in the petrol should be alarming.  The move is aimed at reducing the fiscal deficit, thus saving RM1.1bil per year for the Government, said Prime Minister Datuk Seri Najib Tun Razak. Najib said despite the increase, the government would still be subsidising 63 sen for RON 95 petrol. "The subsidy rationalisation will be carried out in many stages. The first is that the price of RON95 and diesel will be increased by 20 sen per litre from 12.01am Tuesday," Najib told a press conference after chairing a meeting of the Fiscal Policy Committee (FPC) on Monday. There have been talk of ways the government would do to help the lower income group in Malaysia but all of that ...