Cheap fuel — the RM4 billion a month tradeoff on Malaysia’s future

 Subsidised petrol distorts everyday decisions, normalising sprawl, multiple car ownership, and long commutes.

From Boo Jia Cher

RM4 billion a month — that’s the estimated fuel subsidy bill as of late March, a sharp rise from earlier baselines, driven by sustained high global oil prices arising from Middle East tensions and disruptions.

For drivers, RON95 at RM1.99 feels like relief while regional prices climb (it’s RM10.50 per litre in Singapore). Yet this masks massive opportunity costs for families, businesses and cities.

Cheap fuel shifts expenses rather than eliminating them. Subsidised petrol normalises car dependency, making long commutes and congestion feel routine despite the softened upfront pain.

Taking naps or scrolling Tiktok while your is engine running, and making solo drives for short trips, seem less wasteful here than elsewhere, where they would register as clear extravagance.

Real costs persist: billions in annual air pollution health expenses, RM25 billion economic losses from traffic crashes (per 2023-2024 estimates), expanding highways consuming public land, and around 1.7 hours daily lost to Klang Valley gridlock.

What we sacrifice

RM4 billion a month could reshape urban mobility, yet basic pedestrian infrastructure remains underfunded. Klang Valley residents dodge multi-lane roads without safe crossings, bake under equatorial sun, and slog through rain to catch their trains.

Redirecting one month’s subsidies could fund:

1,250 electric feeder buses (RM3.2 million/unit), boosting ridership and cutting hundreds of thousands of car trips daily;

2,500km covered walkways (RM1.6 million/km), connecting 1.5M+ residents to stations and trimming around 450,000 car trips;

5,000km protected bicycle lanes (RM0.8 million/km), each handling 7,500 people per hour;

60 new KTM electric trainsets (RM65 million/unit), adding capacity for 70,000+ peak riders; and

1,000 safer school zones (RM4 million each), slashing child road deaths by up to 80% and easing school-run traffic.

Total impact: 1.4 million fewer daily car trips, with proven crash reductions.

Breaking the spiral

Indonesia’s subsidy shift (2015-2023) delivered more than 10,000 buses, cutting Jakarta’s congestion by roughly 20%. Denmark’s cycling investments yield €2.5 per €1 in health and time benefits. Why not Malaysia?

The BUDI95 subsidy cushions households, but it also entrenches dependence on cheap fuel, which distorts everyday decisions, normalises sprawl, multiple car ownership, and long commutes, while making walkable neighbourhoods a pipe dream and viable public transport harder to sustain.

Without subsidies, it’s worth asking: would the Malaysian car-centric way of life still hold?

Rising costs are not just a burden; they are a signal.

Electric vehicles may change the engine, but not the system. They replace one dependency with another while preserving the inefficiency of private transport.

What’s needed is a structural pivot, from subsidising cars to investing in a multi-modal network that moves more people, more fairly and efficiently.

RM4 billion a month is not just casual spending. It is a reflection of national priorities and a choice about what kind of future for Malaysia we are willing to fund. - FMT

 Boo Jia Cher is an FMT reader.

The views expressed are those of the writer and do not necessarily reflect those of  MMKtT.