PETALING JAYA: Government expenditure on social welfare and direct assistance surged by over 380% in 2025, despite overall subsidy spending dropping by 40.1% during the same period, according to the Auditor-General’s Report Series 2/2026.
Total subsidy spending fell to RM23.428bil in 2025 from RM39.096bil in 2024, largely driven by a sharp decline in petroleum subsidies.
Petroleum product subsidy expenditure dropped by RM15.793bil to RM19.114bil in 2025, down from RM34.907bil the previous year.
“The reduction in subsidy expenditure was attributed, among other factors, to lower global crude oil prices, the targeted diesel subsidy initiative introduced in June 2024, and the targeted petrol subsidy initiative implemented in September 2025,” said the report, which was tabled in Dewan Rakyat on Monday (Oct 5)
Global crude oil prices averaged US69.05(RM282.25)perbarrelin2025,comparedtoUS80.82 (RM330.34) per barrel in 2024. Petroleum subsidies cover petrol, diesel, and Liquefied Petroleum Gas (LPG) based on the gap between government-controlled retail prices and market rates.
In contrast, government spending on social welfare grants and cash assistance for individuals and families skyrocketed to RM20.364bil in 2025, an increase of RM16.129bil, or 380.8%, from RM4.235bil in 2024.
The report noted that the steep rise was primarily driven by disbursements under Sumbangan Asas Rahmah (SARA), Sumbangan Tunai Rahmah (STR), the BUDI MADANI subsidy assistance program, and related STR operational costs.
Meanwhile, toll compensation subsidy expenditure rose 19.5% to RM917mil, up by RM150mil from RM767mil in 2024. This covered compensation to highway concessionaires for deferred toll rate hikes and festive toll discounts.
Expenditure on food and supplementary food assistance recorded a slight 1% increase, rising by RM23.86mil to RM2.513bil from RM2.489bil in 2024. The largest component was the Cooking Oil Price Stabilisation Scheme (COSS), which accounted for RM1.942bil, down slightly from RM1.945bil in 2024.
