Kuala Lampur:First paragraph of the news story: The government has successfully reduced its subsidy expenditure by 40.1% to RM23.43 billion in 2025 from RM39.10 billion in 2024. This reduction is attributed to the decline in crude oil prices and the implementation of targeted diesel and petrol subsidy reforms.

According to BERNAMA News Agency, the Auditor General's Report (LKAN) 2/2026 on the Federal Government's Financial Statements for 2025 highlights a RM15.67 billion reduction in petroleum product subsidies. The subsidies decreased from RM34.91 billion in 2024 to RM19.11 billion in 2025.

The report states that the decline in global crude oil prices, along with reforms in diesel subsidies from June 2024 and petrol subsidies from September 2025, contributed to the reduction in subsidy expenditure. The average global crude oil price fell to US$69.05 per barrel in 2025 from US$80.81 per barrel in 2024.

Petrol subsidy expenditure decreased by 46.5% year-on-year to RM10.51 billion, down from RM19.66 billion in 2024. Diesel subsidy expenditure saw a 48.2% year-on-year decline to RM5.98 billion from RM11.54 billion the previous year.

Additionally, liquefied petroleum gas (LPG) subsidy expenditure decreased by 29.1% year-on-year to RM2.63 billion from RM3.71 billion. However, there was a significant increase in expenditure on welfare grants and assistance for communities, individuals, and families, rising by 380.8% to RM20.36 billion in 2025 from RM4.24 billion in 2024.

The increase in welfare expenditure was partly due to the disbursement of various subsidy assistance programs such as Sumbangan Asas Rahmah (SARA), Sumbangan Tunai Rahmah (STR), the MADANI Subsidy Assistance Programme (BUDI MADANI), and STR operating costs.