From Boo Jia Cher

It is tempting to treat current fuel pressure as temporary: blame global tensions, supply disruptions and assume things will settle with time.

But that framing misses something deeper. What we are facing is not just a fuel issue, but the outcome of how our cities and towns have been built, quietly locking the country into deepening fuel dependence and rising fiscal costs.

 Pressure at the pump and at the Treasury

The recent introduction of a 200-litre monthly cap under BUDI95 has triggered anxiety. That reaction is revealing.

Two hundred litres is not small by global standards. It supports substantial daily driving. In dense, transit-oriented cities like Tokyo, many households use far less.

But Malaysia is not built like Tokyo. Even in KL, everyday life often revolves around the car. It is a system that assumes constant driving as the default.

That assumption has a second consequence: it drives the government’s growing fuel subsidy bill.

When Malaysia is built around cars, fuel stops being discretionary and becomes structural. Highways, low-density townships, and car-dependent commutes lock in sustained demand.

The government then absorbs part of that cost through subsidies, all because the system guarantees high consumption.

Subsidy pressure, then, is not only a fiscal issue. It is an urban planning outcome reflected in the national budget.

The hidden cost of ‘cheap’ fuel

For decades, relatively low fuel prices have shaped how Malaysians live.

When driving is cheap, distance stops to matter. Forests and agricultural land give way to suburban expansion. Shops and malls are designed for car access. Roads widen, while walking and cycling are treated as secondary modes.

Rising incomes, highway expansion, and planning decisions all played a role. But cheap fuel made this pattern stable and politically easy to sustain.

The result is a landscape where distance is embedded into daily life. Driving becomes the default. Walking or cycling is often impractical. A simple grocery run typically requires a car.

Even where alternatives exist, they remain uneven. Rail is improving but incomplete. Buses are infrequent and unreliable.

In many places, driving is not just common. It is structurally required.

Building demand into the city

Look at major interchanges like Bulatan Kampung Pandan. It occupies a vast area of valuable land just minutes walk from Tun Razak Exchange, yet it is designed entirely to move vehicles, not people.

From a transport perspective, it serves a function. But from a land-use perspective, the cost is high: walkability is broken, neighbourhoods are fragmented, and central land that could support housing or economic life is locked into traffic circulation.

Now imagine that same land redeveloped into affordable housing within a park, connected to transit. Residents could walk, cycle, or take a short train ride into the city.

This is not isolated. Across KL, the same logic repeats in quieter forms:

• Surface car parks on prime land
• Oversized setbacks along major roads like Jalan Ampang and Old Klang Road
• Multistorey parking embedded into new developments

Individually, these choices seem practical. Together, they reinforce a system where driving is necessary and alternatives are steadily weakened.

Why this matters for fuel and subsidies

Fuel policy is usually discussed in terms of prices and subsidies. These matter, especially for household budgets and inflation.

But they do not address demand.

If people must travel long distances for work, school, and daily needs, fuel use remains structurally high regardless of price. The government can adjust subsidies, but it is ultimately managing the cost of a geography that produces high consumption by design.

This is why subsidy bills keep rising: the underlying system continues to generate demand.

The more durable solution is not only financial adjustment, but demand reduction, changing the conditions that make fuel-intensive living necessary.

That means:

• More mixed-use development so housing, jobs, and services are closer together
• Transit-oriented growth instead of highway-led expansion
• Reconsidering minimum parking requirements
• Designing streets for access, not just traffic speed
• A tax on vacant lots to encourage development of housing in the city.

This is slower than price changes, but it directly reduces fuel dependence long-term.

The hard part

Highways and fuel prices are visible and politically straightforward. Land-use reform is not. It challenges developers, landowners, and long-held assumptions about urban growth.

But continuing the current model carries long-term fiscal consequences. Every new car-dependent development locks in decades of fuel demand and decades of subsidy pressure.

In that sense, urban planning is not separate from fiscal policy. It is one of its main drivers.

When prices shift again

Fuel prices will rise and fall. Policies will change. Budgets will tighten and expand. But unless the structure of cities changes, the underlying vulnerability remains.

The problem is not only what fuel costs today. It is that our built environment assumes we will always need large amounts of it just to function, and that the government will always absorb part of that cost.

Fixing that does not begin at the pump. It begins with how we choose to build our cities.

Boo Jia Cher is an FMT reader.

The views expressed are those of the writer and do not necessarily reflect those of FMT.