INTERACTIVE: Malaysia’s fuel subsidy bill faces RM50bil risk if oil stays above US$100
By SHYAFIQ DZULKIFLI PETALING JAYA: Malaysia’s fuel subsidy bill could approach RM50bil in a prolonged oil-price shock scenario, according to an economist. Khazanah Research Institute (KRI) research associate Dr Mikhail Rosli estimated Malaysia’s fuel subsidy bill could cost between RM45bil and RM50bil next year if Brent crude prices remain above US$100 per barrel. He said the estimate would be broadly in line with the KRI’s Beyond The Pump report which estimated fuel subsidies will cost around RM48 billion per year when the crude oil prices exceed US$100 per barrel and remain at that level. However, he stressed that this remained a “tail scenario” rather than the most likely outcome. “This remains an unlikely scenario, as the US Energy Information Administration’s base case projects Brent crude to average US$74 per barrel in 2027, while the World Bank forecasts US$70 and the IMF’s severe scenario at between US$110 and US$125,” he said. The wa...