MONEY MASTER

The Malaysian government has announced a  4 sen per litre reduction  in the retail prices of  RON97 petrol  and  diesel  in Peninsular Malaysia, effective  August 14–20, 2025 . RON97 : RM3.13/litre (previously RM3.17) Diesel (Peninsular) : RM2.90/litre (previously RM2.94) The price of  RON95 petrol  remains unchanged at  RM2.05/litre , while  diesel prices in Sabah, Sarawak, and Labuan stay fixed at  RM2.15/litre . According to the Ministry of Finance, the adjustments reflect changes in global oil prices under Malaysia’s  Automatic Pricing Mechanism (APM) . Authorities will continue monitoring prices to ensure stability and safeguard consumer welfare.

Kenanga Research’s analysis of Malaysia’s new  “Appreciation Package”  highlights both short-term economic benefits and long-term fiscal challenges: Key Measures: RM100 cash aid (Sumbangan Asas Rahmah – SARA Untuk Semua)  for all eligible Malaysians. Reduction in RON95 petrol prices  to  RM1.99/litre  (from RM2.05) for eligible groups. Package cost estimated at  RM2.8 billion (~0.14% of GDP) . Economic Impact: ✅  Boost to private consumption  in 2H25, supporting GDP growth at  4.3%  (vs. 5.1% in 2024). ✅ Expected to offset trade risks from global tariffs and support domestic demand. ✅ Inflation forecast revised down to  1.7% (from 2.0%)  due to fuel price cuts. Fiscal Trade-offs: ⚠️  Fiscal deficit for 2025 projected at 4.1% of GDP , exceeding the initial 3.8% target. ⚠️ Government debt expected to hit  RM1.33 trillion (65.9% of GDP) , potentially breaching the statutory debt ceiling (65%). Fuel Subsidy Reform: T...

The Ministry of Finance (MOF) is still refining the mechanism for the targeted RON95 fuel subsidy, which is expected to be implemented by mid-2025. According to Muhammad Kamil Abd Munim, the Political Secretary to the Finance Minister, the MOF is actively engaging with stakeholders to ensure that the subsidy program is implemented smoothly without causing confusion or anxiety among the public. During an appearance on Bernama TV’s Ruang Bicara program, Muhammad Kamil emphasized the importance of carefully examining the details of the subsidy to protect the welfare of deserving groups, ensuring they continue to receive the financial support they need. The proposed targeted subsidy was announced by Prime Minister Datuk Seri Anwar Ibrahim in the 2025 Budget, with the aim of saving up to RM8 billion, as 40% of the RON95 subsidy currently benefits foreigners and wealthy individuals. The government remains committed to maintaining subsidies for the majority of Malaysians, similar to the appr...

The Australia & New Zealand Banking Group (ANZ) has issued a cautionary report regarding Malaysia's need to rationalize its RON95 petrol subsidies in 2025, especially following a significant salary hike for civil servants. Here are the key points from the report: Fiscal Burden and Subsidy Context Current Subsidy Situation: While the subsidy burden for RON95 has decreased compared to previous years, it remains at a high level. The government's recent decision to increase civil servants' salaries—by at least 13% , effective December 1, 2024—will add approximately RM10 billion to operational expenditures. Government Revenue Trends: Malaysia's revenue contracted by 6.3% in the first half of 2024 year-on-year, while expenditures grew by 1.3% during the same period. Recommendations for Subsidy Rationalization Urgent Need for Change: ANZ emphasizes that the blanket subsidy on RON95 needs to be removed to prevent escalating fiscal pressures. This follows the recent re...