Lessons Learned: Malaysia’s 2013 Fuel Subsidy Reform (GSI)

On 2 September 2013, Malaysia’s Prime Minister Datuk Seri Najib Razak announced that the price of diesel and RON95 gasoline would increase by 20 sen (US$ 0.06) overnight, and that cash transfers would be increased to mitigate the impact on the poor. This case study by the Global Subsidies Initiative (GSI) provides an overview of this partial reform to Malaysia’s fuel subsidies, summarizing the context that surrounded the decision and three different aspects of the reform: its changes to Malaysia’s pricing system for fuel; the impacts that reform had on the economy and households; and how the reform was communicated and perceived. It concludes with a set of lessons that other countries might learn from these experiences.