PUTRAJAYA will not reduce any existing subsidies and aid amid the Middle East conflict, says Deputy Finance Minister Liew Chin Tong (pic).
This is despite the government having to foot a projected RM40bil in subsidies for petroleum and petroleum products for 2026 due to the conflict.
“This is the government’s current position,” he added.
Liew said with Budi95, the people are shielded from the impacts of the conflict.
“The people are paying RM1.99 although the actual price in March and April was RM5 a litre,” he added.
He said the government was able to ensure that Malaysians have access to fuel when consumers from other countries have to queue up for the commodity.
He was responding to Mohd Sany Hamzan (PH-Hulu Langat) who asked whether the government have plans to reduce assistance such as Sumbangan Tunai Rahmah (Sara) and assistance for school going students due to the conflict.
Meanwhile, Liew said the Finance Ministry does not see a need to recalibrate its Budget 2027 estimates for now despite the conflict.
“However, we will study the situation by October. We will monitor the situation and the impact of the Middle East conflict. It depends on what happens there,” he added.
Liew said the government spends RM800mil a month for RON95 and diesel subsidies in January and February. However, the amount increased to RM5bil a month in March and April.
“The subsidies cost for May and June moderated to around RM4bil a month. Oil prices continue to moderate in July and if the current market price remains, the government is projected to foot RM40bil in subsidies for petroleum products for 2026. This depends on the Middle East crisis,” he added.
He said while rising oil prices have increased the cost of subsidies, they have also increased revenue from petroleum.
“Every US$1 per barrel change in the global crude oil price is estimated to have an impact of approximately RM300mil on the Federal Government’s petroleum-related revenue. This does not include PETRONAS dividends,” he said.
He said the increased revenue would be able to cover a portion of the subsidies bill.
Liew said the government continues to monitor the weekly development of the conflict through the National Economic Action Council (MTEN) and crisis management unit.
If necessary, he said any revision to the 2026 fiscal projections will be announced during the tabling of Budget 2027, taking into account the latest economic indicators and the performance of revenue collection and expenditure up to the first half of 2026.
Budget 2027 will be tabled on Oct 9.
