Mon, 17 Oct 2011 06:06:29 GMT | By Sebastian Loh

Subsidies in Malaysia: How much does the government pay?

There's been much talk, debate and outrage over how far the government goes in subsidising 'basic necessities' in this country. We look at the amount of taxpayer ringgit allocated to each of the main subsidised items to make them more affordable for the rakyat.

AP Photo, Vincent Thian (© AP Photo, Vincent Thian)

As many ordinary Malaysians (especially in urban areas) will tell (and swear to) you, living in Malaysia isn't cheap by any means. The rising cost of living continues to be an inestimably major issue in Malaysian politics, regularly evoked by opposition political parties to attack the ruling government.

In this article, we look at how much the government actually contributes to making 'basic necessities' (such as fuel and food items) cheaper for citizens. Is the government paying too much, too little, or just the right amount? You decide and you tell us.

>>>CLICK TO CONTINUE>>> Go to the following pages to see how much taxpayer ringgit is allocated to each of the major subsidized items from fuel to flour. (Figures taken from Prime Minister Najib Razak's recent Budget 2012speech)

Explanation of the terms
Actual price = Unsubsidised market price of the said item
You pay = How much you (the public) pays for the said item after the subsidy
Government pays = The portion of the actual price (in ringgit) 'swallowed' or subsidised by the government
Subsidy percentage = Percentage of the item's actual price subsidised by the government


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May 29, 2012 11:14AM
As a Malaysian born E****mics student living in the UK, the government is beginning to pay the price for its intervention of subsidising oil in the past. With the inevitable increase in price of fossil fuels, the government should gradually reduce the subsidy and let me stress, at a sustainable pace. Instead, it should focus on harnessing green energy and subsidising more sustainable methods of meeting energy demands. These include a wide range of options from geothermal, hydroelectric to solar and nuclear. 

Yes it is difficult and expensive but we must think ahead for the future generations. A developing e****my like Malaysia could only brace itself until present technology improves such as cheaper electric cars etc. It is unfortunate that the government is pay too high a price for its subsidies, but this hinders the fundamental free market e****mics. Malaysians are also, I dare say: wasteful. Take petrol for instance, only a minority are as thrifty as the British. 

I agree that subsidy should be given, but this cannot be sustained any longer. If the government does opt to reduce the price of petrol, then Malaysia would no doubt experience higher and higher inflation in the long run. However:

As the new school of e****mics would argue, we cannot simply subsidise and throw money at everything and eventually hope it would get better. This is modern era e****mics, not Keynesian. The government should aim to cut is debt like Osborne is attempting for the UK. 
Oct 24, 2011 9:35PM
As long as it is not a burden to the raakyat and country, subsidies should remain where necessary.
Oct 20, 2011 3:19AM

First of all we all live in Malaysia and everyone should enjoy the fruits of the country.

Subsidies are fine for the basic items for everyone.

The 32 billion is no sweat for the country if we spend wisely on things that matter instead o****nseaworthy submarines, paying for hand bags, spending money on sex, wasting money on alleged sex cases, cronyism, corruption and worst of all for inefficiencies and poor performance of our ministers and third raters!


Hence when you ask this question, my simple answer is subsidies are really pennies compared to the ****ve  mentioned and as such please lah dont try to make us look stupid! 

Oct 19, 2011 6:10PM
Well, if you want to say is too much that does not make sense. You can see everything including groceries keep incresing, most RAKYAT still suffer from that. Some even living in a urban area without electricity, water and food. If government say it is too much ask the RAKYAT to save, i want to say it here, can u stop the CORRUPTION and spend it on the poor or who need a hand? If you say no or little corruption in Malaysia, no one will believe. From 2001 to 2010, illicit ****nd was RM8888 billion (Money flew out to oversea). Our national debt is RM 4372 billion. What makes this happened? No open tender in Malaysia, everything gives to crony first. Projects cost a few times more than the market price.  The rich gets more subsidies than the poor ones. But I know some will say government helps the poor, yes that is true, it is always near the election the poor will get helped, no other times. Government would not suffer with this amount of subsidies if they stop the CORRUPTION.  
Oct 19, 2011 1:02AM
Why tax us then subsidies to make everything become EXPENSIVE??? government subsidies to pay for those subsidies item producer's PROFIT then TAX them back but all other FOOD manufacturer are paying diesel (bahan api untuk masak), flour, cooking oil & sugar (bahan mentah) at non subsidy price. That make cost for ALL RAKYAT DAILY FOOD so EXPENSIVE !!! 
  If government subsidies to those food  manufacturer's raw material den they can make cheaper food such as bread, noodle, biscuit & ........., then all our hawker, mamak stall, cantin & restaurant can sell cheaper food and drinks. This can benefit to all RAKYAT especially those who live in a CITY.
Oct 18, 2011 6:22PM
Well the present day government has to meet a lot of new challenges financially compared to yesteryears. But first let us reason whether all spending by the government is fair and reasonable and justified. Yes the new ISTANA issue, is this really necessary or the proposed Warisan Merdeka building. Why do we Malysians always want to be the first in Tallest building, longest this and biggest that. Lets say the basic needs must be first met in all districts and every state. Food, shelter, clothing and prices of basic groceries within the reach of every average earning Malaysian. Then good roads, electricity supply and clean water supply for all estates and kampongs in the interior areas of every district. Definitely subsidies provided by the government is help****l to most needy Malaysians. In my working experience of 32 years I have come across areas that were sorely lacking of basic amenities, medical supplies & clinics, schools. This areas are only visited once in every 5 years when the in****bent MP wants to secure votes. After that all sweet nothings and rosy promises are conveniently forgotten. Basic Malaysian response is we make a hue and cry over everything that happens tragically but do not even lift a ****er to prevent this everyday tragedies in life. After the tragedy all is conveniently forgotten till another occurs. Even the local authorites lift their guard down, lack of enforcement and bribery being the downfall. Sad to to say till the tidak apa at****ude of basic Malaysians vanish, only then a new vitalised Malaysia Baru can emerge.
Oct 18, 2011 4:47PM
Only petronas can afford to subsidise our livings. Can you imagine what will happen if we turned back time if the country have no oil!  Where to find extra revenue to starve off all our basic needs?  To run a government must knows how to balance budget... in nut shell, how to earn, save and spend.  Earnings are from taxes and collections... ya ya, try to collect extra revenue from those taxpayers of not declaring assests and incomes properly.  Saving is practically nil... even do government announced the country has huge foreign reserve ****nd and bank negara have unconfirmed (secretive) limitedless cash reserve.  These are offset by the country's even bigger deficits and debts!  Spending is like presenting the rakyat with sweet deserts!  Should we go on living with or without RM30 billion subsidized basic needs?  That calculated to RM1,000 per population.  In fact, if employers paid salaries additional few thousand RM to each employee per year, we do not need any of those subsidized items!  
Oct 18, 2011 1:00PM

****: r u guys? hows ur country n the ppl doing..ok ar?


msian gov: we doing are great! we are the best management team! we run the country so well till the people can't even afford their basic needs.


****: oh really? then how are the rakyat surviving?


msian gov: our rakyat are so dumb...easy to con. we give subsidies for some of the goods which are considered as their basic needs.


****: subsidies? generous ar u guys!...good!..good!


msian gov: nah! we tax them for everythin n then probably use 1/4 of that money to give subsidies on some of the goods. n then we will highlight to them that "WE" the gov is helping the rakyat to buy their basic needs.


****: ooo...not bad. smart ar u what ****ut the balance 3/4?


msian gov: what else...we enjoy bungalow, open business  for my family, vacation, etc...etc...


****: whoaa! malaysi****leh lar!










Oct 18, 2011 4:17AM

Najib's budget promised to maintain subsidies on ****el and food items that his government had earlier moved to scale back in a deficit-reduction drive.

The subsidy cuts had caused a ****rther spike in costs of transport and essential commodities that had already risen along with surging world prices. Najib said government workers would get larger-than-usual pay rises, all fees in public schools would be ****lished and the government would adjust property transaction taxes in a bid to curb market speculation. Various tax breaks and other incentives would be extended in a range of industries to stoke both domestic and foreign investment, he added. Apart from that, Msia's e****my grew 7.2 percent in 2010 but slowed to 4.0 percent in the second quarter of this year. At last, Budget 2012 is pre-election budget towards voters. It seems the gov't promise everybody everything on earth, bu****'s completely irresponsible
Oct 18, 2011 3:31AM

Why does the government subsidies? B'cos our nation is getting poorer and we need to pay higher for imports.

We are an oil producing countr****ealy our petrol is free plus the processing cost and our palm oil is grown here so the cost should add up to be cheaper.


But being a poor nation our exchange rate is weak and we buy expensive.


Papua New Guinea is even richer then us now! Their 1 Kina is worth RM1.55.


We sell oil, palm oil, rubber and timber and yet we are getting poorer. The current government is not doing the right thing.Even now Federal Land under FELDA needs to

be sold by listing it. !!!!!????


Oct 18, 2011 3:15AM

i think govt has no right to boast on the subsidy....the money belongs to ppl.... the resources on this land belongs to his ppl..... basically govt saying shut up and don't ask so much...but how to kp quite..... when tax payers money  wasted for new istana for it really necessary...what is the contribution of royal family e****mically for the country.....question mark????? when the money could hv channeled to all subsidy for ppl and ease our burden..... govt need to realize ppl are not stupid...

Oct 18, 2011 2:47AM
Our great govt is subsidizing our staples after taxing us, wow... yey...  And the point of showing this article NOW being?

Yes, we all want to keep all the money we made through blood and sweat, buy things cheap, have a stable life. It's never easy to run a govt. You wanted the job, do it, and do it well, and stop whining ****ut how the RAKYAT is not grate****l for your efforts.
Oct 18, 2011 2:03AM

we pay tax for wat??.in malaysia we hav everytg,sugar,petrol,diesel,oil,milk, n many more.

why in brunei te petro is cheap,why cant we get te same since both country manufacturing ****el.

i don understand wat n hw gov subsidies petrol,diesel,sugar,milk??? since everyt****ade in can a goverment run te show if its going like this

Oct 18, 2011 2:00AM

Sorry to say this: Are we still 1 Malaysia? The goods for Sabah is definetly different price. I am from Semporna, Sabah, Malaysia.


Selling price here in Semporna:


Sugar: Rm 2.50/1kg

Cooking Oil: Rm 2.75 or even more/1kg

Flour: Rm 1.60 - Rm 1.80 or higher/ 1kg

Diesel: Rm 1.80/liter (standard)

Cooking Gas: Rm27 - 28/tank


It is not standarized due to the fact of different region and transportation fee, So you can't just ****n article saying Govt subsidized that amount. We are here paying almost the same or higher as non-subsidies.


For your information as well, we are always out of stock. One momen**** can be flour, another day, it can be sugar or cooking oil. We, Sabah as one of the palm oil manufacturer, couldn't even ****lfill our own local demand. 


Right now at the moment, I am typing, we are out of packet sugar. Sometime we don't get supply from agent due to the fact, they are sending to the goods to local Tawau shop to save transportation cost while for  Semporna, agent need to drive 2 hours up to send the goods, therefore at certain time, we who live in Semporna, need to drive down to get basic goods.


This is a frustration situation happening here!

Oct 18, 2011 2:00AM
Ke****an sepatutnya subsidi Tepung Susu import, seperti Maternal Milk for pregnant woman & breast-feeding mother & tepung susu formulted milk untuk kanak-kanak, bukan subsidi untuk gula! Harga tepung susu import semakin mahal.  Lagipun, pesakit diabetes di Malaysia makin meningkat, KKM juga memberi nasihat supaya rakyat Malaysia mengurangkan pengambilan gula.

In a perfect work we wouldn't need subsidies because costs of goods and services would have minimal or no tax, there would be no profiteering, nor would there be speculative driven pricing or derivative pricing let alone ****tures pricing.


I would settle for minimal or no subsidies on certain items e.g. sugar and even pe****nd diesel if Govt would subsidise ****el costs for the transport and public transport industry and to bring down all forms of taxes on goods and services to zero or just ****ve. Bring in the GST but cap it at 3% max with no room for review.

Oct 17, 2011 11:42PM
WHY we choose to have G.O.V.E.R.N.M.E.N.T for the rakyat???? because we rakyat trusted in them who can leads, manageable, taking care of the rakyat and protecting us from being live lives proverty, goes hunger like many poor countries. But instead this **** Government rob us instead???  They are more in helping those baddies become millionaires to billionaires. This is obviously happens and seen by many.
Oct 17, 2011 10:22PM
Well, this issue of subsidies shouldnt be an issue at all. The people appointed the so called government to manage the country and it's resources for the people benefit and thus must be given back to the people, instead of saying the government over subsidised this and that, in fact the country wealth and resources just circulating around a hand****l group of people, so dont say that the people should understand this or that ****ut subsidies as this is the right of all Malaysian people to enjoy the benefits from the country wealth from its own resources! nowadays we are thinking more clearly and inteligently on what were said ****ut this issue, some would get carried into believe that if subsidies still in existence then the govt will go broke, creating fear, but to the thinking people, thats certainly not influencing their clear consciences on the true issue behind all this subsideis matter. when world crude oil goes up, politicians started to say this and that canot maintain subsidy, now price going down, all 'senyap' waiting for another circle of price increase to 'bising-bi****gain...... think for ourselves then..........
Oct 17, 2011 9:33PM
What does subsidy means ? The Gov. need to explain in details at every stage of cost from the begining of process, like PETROL for instance.

In normal cir****stances: If cost is                                   0.50 
                                                Selling Price is                      0.50
                                                 The differences is                0.00  per litre 

Refer to ****ve, there's no subsidy required using taxpayers ****nd to bail the cost. Means no subsidy required - it's break even. We Malaysians should be buying pe****t the cheapest price in the world.

Being the producer, processor, distributor and seller of PETROL the total cost must be very efficient and therefore bail-out is not required, unless PETRONAS is being miss-managed.

Petronas belong to Government, means owned by all Malaysians. Declaring > than 80 billion profit (RM) per year is no joke. Yet the government is still seeking individual taxpayers ****nd, corporate taxes, small business taxes, GST, Import & Export Duties and etc totals more revenue than expenses for every budgeted year. No savings and our reserves are at critical stage.

Being one of the richest country in the world with the best natural resources without natural disasters, yet our country leaders are still struggling to manage.

Stop burdening the public and comparing or bench-marking cost with other countries. Being the muslim country as declared we expect sincere and honest leaders to grow the country compe****ively in the global market. No secrets or wrong doing can be hidden in todays world. Everything can be calculated and measurable.

Money is created by human being to replace barter trade and not to control every aspect of human life.

Think positively and look forward to change those don't want to change for the benefit of our good life and country as whole.      
Oct 17, 2011 8:51PM

Perhaps it would be appropriate to list down subsidies given by other countries within the region as a comparison to really appreciate whether or not our government has done or given enough.  Given the opportunity, everyone would want things for free.  And human nature as it is, one will never be satisfied with what they have. Add greed, laziness and the "subsidy mentality" to that, no amount of subsidy will suffice.


So, it will never be too much.  Perhaps it will be just enough for a small section of the populace (that probably too because they are pro establishment). And the majority of the rakyat will say its too little.  Obvious isn'****?  Then, may be, we should try living in Somalia ... you get bullets for free over there.!

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