Subsidy reform a la Malaysia – one tiny step at a time
Such policy changes – on their own – may not move the needle in a big way, but they represent small nudges towards a sustainable fiscal path
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[SINGAPORE] Fuel subsidies are the third rail of Malaysian politics – touch them and one risks getting burned, even more so when an election is around the corner and political backlash is never far away.
For that reason, the government’s latest announcement on its widely used RON95 transport fuel is worth contextualising.
For one, it’s not just about what Malaysians will pay at the pump; it’s also a curtain-raiser for Budget 2026 on Oct 10. The overriding theme appears to be modest fiscal consolidation as external headwinds build. Think tariff skirmishes, slowing global trade and semiconductor uncertainty.
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