From fiscal standpoint, it ensures public finances stay sustainable, with government being able to better manage subsidy expenditure, says economist
PETALING JAYA: The government’s move to temporarily adjust the monthly subsidised RON95 petrol quota from 300 litres to 200 litres from April 1 is unlikely to significantly impact the majority of households, said an economist.
Universiti Teknologi Mara Malacca economy expert Dr Mohamad Idham Md Razak said while the adjustment may initially raise concerns among motorists, the policy shift should be viewed through a pragmatic economic lens rather than as a restrictive measure.
“From a fiscal standpoint, this allows the government to better manage subsidy expenditure at a time when global oil prices remain elevated and volatile.
It ensures that public finances stay sustainable without removing subsidies altogether,” he said in his WhatsApp reply to theSun.
Malaysia’s fuel subsidy bill has long been sensitive to global crude oil movements.
With ongoing geopolitical tensions and uncertain energy markets, maintaining a blanket subsidy at higher consumption levels could place additional strain on government spending.
Idham said by setting the cap at 200 litres, the policy effectively preserves support for the majority while discouraging excessive or non-essential fuel consumption.
He said by moderating demand for subsidised fuel, the government is better positioned to safeguard national reserves and ease pressure on domestic supply chains.
“This is not outright rationing but it introduces a level of demand discipline.
In an environment where global energy flows can be disrupted, such measures help build resilience.
”He said the policy should be seen as part of a broader, calibrated reform approach rather than an abrupt shift.
“It balances immediate cost-of-living concerns with longer-term fiscal responsibility and energy security.
Importantly, it does so without creating panic among consumers.
”The Federation of Malaysian Consumers Associations described the government’s decision as a precautionary and strategic move amid ongoing global uncertainties.
Its CEO Dr T.Saravanan said the adjustment should be viewed together with the geopolitical tensions which pose risks to global fuel supply chains and market stability.
“From a logical and economic standpoint, this measure is aimed at strengthening national fuel security and ensuring that supply remains stable and sufficient for all consumers.
”He said disruptions in global energy flows could lead to volatility in fuel availability and pricing, making it crucial for governments to manage domestic consumption effectively to prevent shortages and panic buying.
Saravanan said the revised quota is unlikely to significantly affect the majority of Malaysians as most consumers utilise less than 200 litres per month.
“Instead, the move helps curb excessive consumption, minimise leakages and ensure that subsidies are better targeted towards genuine users who truly need them.
”He said the policy also reflects a balanced approach by the government, particularly in its decision to maintain a higher quota for e-hailing drivers who rely heavily on fuel for their daily income.
