Petronas profits meant for long-term national wealth, not short-term subsidies, says MP

2026-03-23 - 03:50

Chong Zhemin said Malaysia should take a leaf from Norway and save a significant portion of Petronas’s windfall gains instead of spending them all on short-term fuel subsidies. PETALING JAYA: Profits from Petronas should be treated as strategic national wealth, rather than being spent on blanket fuel subsidies, says a government MP. DAP’s Kampar MP, Chong Zhemin, described Urimai chairman P Ramasamy’s proposal to expand fuel subsidies using the national oil company’s windfall gains as unsustainable and irresponsible. Chong Zhemin. Chong cited Norway’s disciplined approach with its sovereign wealth fund, where oil revenues are largely saved and invested globally, enabling long-term wealth accumulation and fiscal stability. “Malaysia should move in a similar direction by ensuring that a meaningful share of Petronas’s windfall gains is channelled into long-term savings and investment, rather than being fully consumed through short-term subsidies,” he said in a statement today. Ramasamy’s proposal comes amid the surge in oil prices triggered by the Iran war. The closure of the Strait of Hormuz after US-Israel strikes earlier this month sent crude oil prices to around US$100 per barrel. Despite this, Putrajaya has decided to maintain RON95 petrol at RM1.99 per litre under the BUDI95 scheme for eligible Malaysians, raising the government’s monthly fuel subsidy bill to RM3.2 billion, up from RM700 million previously. Chong said such a move represents a substantial fiscal commitment that must be weighed against broader national priorities, including healthcare, education, infrastructure, and long-term economic resilience. “Expanding this further on a blanket basis would place considerable strain on public finances,” he said. Even with oil prices around US$100 per barrel, Chong said, Petronas’s additional revenue of RM25 billion to RM35 billion would only cover existing subsidies, leaving no fiscal buffer or capacity for reinvestment. “Such an approach would undermine the long-term strength and strategic role of Petronas as a national asset,” he said. He also said blanket subsidies are regressive, benefitting higher-income households disproportionately, while failing to target those most affected by rising fuel costs. Chong urged the government to adopt a targeted approach, focusing assistance on lower- and middle-income Malaysians, while maintaining fiscal discipline and safeguarding Petronas as a national asset. “Malaysia must balance immediate relief with long-term stability, and this requires careful, disciplined policy decisions rather than short-term populist measures that may create greater challenges in the future,” he said.