Malaysia to Review Fuel Subsidies for High-Income Earners, Income Threshold Still Undecided

Prime Minister Anwar Ibrahim said the Malaysian government had agreed in principle to review fuel subsidies for higher-income citizens but had yet to decide the income threshold for ending the benefit. Anwar Ibrahim stated that officials had not determined whether the subsidy cut-off would apply to the T20, T15, T10 or T5 income groups.

He told reporters that the government does not want the subsidy cut-off to affect the upper middle class.

Anwar Ibrahim made the statements after an event on Sunday. “We have yet to decide whether [it will be applied to] the T20, T15, T10 or T5 income groups, as we do not want it to [affect] the upper middle class,” he said. The proposal to review fuel subsidies was prepared by a Crisis Management Task Force headed by former Petronas chief Hassan Marican.

The task force operates under the National Economic Action Council. Malaysia introduced the BUDI95 targeted fuel subsidy in September 2025. 99 ringgit per litre, equivalent to 50 US cents.

That price is among the lowest pump prices in Asia. Malaysia’s fuel bill has surged under pressure from higher crude prices. Supply jitters around the Strait of Hormuz have contributed to the increase.

The Strait of Hormuz is one of the world’s most important oil chokepoints. South China Morning Post reported that the issue has sharpened as the Middle East energy shock strains government finances. Authorities are weighing fiscal discipline against the risk of angering middle-class voters in a car-dependent country.

Anwar Ibrahim faces the politically fraught question of how to define “rich” without punishing households already squeezed by higher living costs.