The Malaysian government has spent RM11.2 billion to cover RON95 petrol subsidies in the eight months since the implementation of the targeted subsidy system on September 30 last year.
This measure was introduced to ensure that subsidy assistance can be provided to those who really need it, thus reducing the financial burden on the people.
According to the Ministry of Finance, approximately 14 million eligible Malaysians have used 11.1 billion litres of RON95 petrol until the end of May this year.
Total sales of the petrol are estimated to be worth RM22.1 billion, with more than half of the cost borne by the government through subsidies.
Under the targeted subsidy system, eligible citizens who have a valid driving license can buy RON95 petrol at RM1.99 per litre.
Initially, each individual was given a subsidy quota of up to 300 litres per month.
However, the quota was reduced to 200 litres from April this year following the increase in world oil prices due to the conflict involving the United States and Iran.
However, e-hailing drivers and gig workers are given a relaxation with a quota of up to 800 liters per month.
The Ministry of Finance also announced that the subsidy expenditure on RON95 and diesel increased sharply after the price of Brent crude oil exceeded US$100 per barrel.
The cost of the subsidy jumped from RM700 million in January to RM7.5 billion in April. Although world oil prices have now fallen back below US$100 per barrel, the government still has to bear high subsidies, which are around RM3.5 billion per month.
To ensure that the country's financial position remains strong, the government is reorganizing spending priorities and tightening control over operating expenses.
In addition, efforts to improve the efficiency of public spending and ensure that subsidies are not misused are also being strengthened so that assistance can reach the deserving groups.
