The Malaysian government is currently facing increasing financial pressure as fuel subsidy expenditure is reported to have reached around RM200 million per day, a figure that reflects a huge fiscal burden in efforts to stabilise the people's cost of living.
This was revealed by the Prime Minister's Office Economic Advisor, Nurhisham Hussein in a special interview on Agenda AWANI, who explained that the amount is equivalent to approximately RM2,300 every second spent just to cover the country's fuel subsidies.
According to him, this situation reflects the real challenge faced by the government in balancing the need to protect the people from the effects of rising global prices, especially crude oil, while at the same time ensuring that the country's financial position remains stable.
The government bears a cost of around RM2,300 every second for fuel subsidies, equivalent to almost RM200 million per day, thus putting enormous financial pressure on it.
Although diesel subsidies help curb inflation, they are no longer seen as sustainable in the long term without the implementation of reforms.
The Malaysian Prime Minister's Office also stressed that while subsidy policies help protect consumers from price spikes, they are increasingly unsustainable if left in the long term without improvements to the fiscal structure.
In the near future, the government is expected to review spending cuts in the next one to two weeks.
At the same time, the people and the industry sector are also encouraged to practice more prudent energy consumption to help reduce pressure on the country's finances.
He also admitted that Malaysia is not yet at a level of full preparedness to face any geopolitical shocks or prolonged supply disruptions, although many lessons have been learned from previous crises such as the COVID-19 pandemic and the Russia-Ukraine conflict.
According to him, several economic sectors are still vulnerable and cannot be fully protected in the event of a major disruption to the global supply chain.
At the same time, the increase in fuel prices in the international market is also influenced by various factors including the cost of crude oil, logistics, insurance as well as disruptions to major world trade routes.
The government is currently focusing on three main priorities, namely controlling cost of living pressures, ensuring that the supply of basic necessities is always stable, and protecting the local business sector including micro, small and medium enterprises (MSMEs) from the effects of global economic shocks.
