SERI calls on Malaysia’s government to expand cash transfers and boost transparency as oil tops US$100

PETALING JAYA: A West Asia conflict now in its third week has pushed global oil prices above US$100 per barrel and disrupted shipping through the Strait of Hormuz, forcing governments across the region into emergency mode.

In Malaysia, think tank Social & Economic Research Initiative (SERI) has released a policy statement urging the government to do more to shield lower-income households from the cascading economic fallout.

Malaysia’s Cushion Has Limits

Malaysia enters the crisis from a relatively stable position. As a net energy exporter with petroleum reserves confirmed sufficient until at least May 2026, and with fiscal space built up through two years of subsidy rationalisation, the country is better placed than many of its neighbours.

The MADANI government has held the subsidised RON95 petrol price at RM1.99 per litre — a commitment SERI acknowledges as a meaningful protective floor.

However, the think tank warns that this cushion does not extend to the full range of costs rippling through the economy.

Rising food prices, higher transport fares, and increased costs of goods and services are already being felt — effects that the fuel subsidy does not address.

With 47 per cent of Malaysians reportedly unable to raise RM1,000 in an emergency, SERI cautions that the margins for B40 households are dangerously thin.

“An oil crisis does not need to reach the petrol pump to impact the dinner table,” the statement reads.

The Lower-M40 Risk

SERI highlights a structural blind spot in Malaysia’s income classification system.

Households in the lower-M40 band — those just above the B40 threshold — typically lack financial buffers and are excluded from targeted assistance programmes, yet are highly exposed to economic shocks.

During the COVID-19 pandemic, roughly 20 per cent of M40 households slipped into B40 status.

SERI warns the current crisis could trigger a similar slide.

Small and medium enterprises in logistics, food services, and retail are also under pressure from rising input costs they may be unable to absorb, threatening jobs that B40 and M40 workers depend on.

Four Policy Recommendations

SERI has outlined four concrete measures it is calling on the government to adopt:

Expanded cash transfers.

The Sumbangan Tunai Rahmah (STR) and Budi disbursement programmes should be reviewed for adequacy. If the crisis persists, the think tank recommends interim top-up payments — similar to the recent increase in Budi Diesel assistance from RM200 to RM300 — to be extended to the broader B40 cohort and vulnerable lower-M40 households.

Price monitoring and caps.

The government should publish fortnightly data tracking how rising energy costs are passing through to essential goods such as rice, cooking oil, flour, fresh produce, and public transport fares, enabling timely rather than reactive intervention.

SME protection measures.

Temporary relief for small businesses should include moratoriums on licensing fee increases, expedited utility rebates, and working capital guarantees through Bank Negara’s existing facilities.

Contingency planning.

While Finance Minister II Datuk Seri Amir Hamzah Azizan has noted that Malaysia’s resilience is contingent on the crisis remaining short-lived, SERI urges the government to develop and publicly communicate contingency frameworks now, ahead of any escalation in fiscal pressure.

A Call for Transparent Communication

Beyond specific policies, SERI’s most pointed recommendation concerns how the government communicates with the public.

The think tank welcomed a special Cabinet session held today to review Malaysia’s fiscal position, but argued that closed-door reviews are insufficient on their own.

SERI is calling for regular public policy briefings throughout the duration of the crisis, covering the state of fuel reserves and supply chains, the reasoning behind policy adjustments, scenario planning trigger points, and the specific impact on vulnerable households.

“Expectation management is not a sign of weakness,” the statement says.

“It is the hallmark of a government that respects its people’s capacity to understand complexity and make shared sacrifices.”

Broader Context: The Human Cost of Conflict

SERI also addressed the root cause of the crisis directly. United States and Israeli military strikes on Iran, launched on February 28, 2026, have killed over a thousand people and displaced hundreds of thousands, according to the statement.

SERI echoed the Malaysian Parliament’s bipartisan call for an immediate and unconditional ceasefire, describing the use of military force as a violation of the United Nations Charter.

The think tank situated the Iran strikes within what it described as a broader pattern of accountability failures — including the ongoing conflict in Gaza and military operations in Lebanon — and called on all parties to pursue a negotiated peace and ensure humanitarian access to affected civilians.

“The costs of war are never borne equally,” the statement concludes. “They fall heaviest on the poor, the displaced, and the forgotten.”

 The Sun Malaysia