Cheap Petrol, Costly Future

If fuel prices keep rising, who really pays the price?

Global oil shocks are pushing petrol costs up, but in Malaysia, subsidies like BUDI95 are holding prices down for now. The problem is, this short-term help is expensive for the government and is not built to last.

Our deputy director of research, Dr. Rachel Gong and visiting researcher, Muhammad Najib Abu Hassan Alshari, highlight that while subsidies protect consumers and support groups like e-hailing drivers, they also create long-term pressure on public finances. Subsidies do not solve the root issue of high oil dependence.

So the bigger question isn’t just how we keep fuel cheap, but how Malaysia can become less vulnerable to global oil price swings in the future.