Dah Securities analyst Shazma Juliana Abu Bakar said Malaysia’s diesel subsidy
reform is likely to have negligible direct inflationary impact because most
eligible diesel users will continue to receive subsidized fuel and logistics
operators are being protected. From July 1 diesel will be priced at market rates
Nationwide while eligible citizens can buy subsidized diesel at MYR2.10/l.
Diesel accounts for just 0.2% of the CPI basket; transport costs and broader
price pressure are expected to remain manageable. The reform should help
preserve household purchasing power but, with a relatively small beneficiary
group, is likely to have limited effect on overall consumption. Dah Securities
maintains its 2026 forecasts: inflation 2.1–2.6% and GDP growth 4.3–4.7%.
