Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim has announced that the subsidy rationalisation of RON95 petrol will begin in mid-2025. This was announced during the tabling of the 2025 national budget (Belanjawan 2025) at the Dewan Rakyat today.
This follows the introduction of subsidy cuts to diesel fuel earlier this year, as part of the 2024 national budget plans.
Like the diesel fuel subsidy rationalisation, the subsidy cuts for RON95 petrol will be done in a targeted manner, with Anwar saying that 85% of Malaysians will not be affected by the change. The top 15% earners (T15) will instead have to pay more for fuel, which will save the government some RM8 billion in subsidies.
He adds that the country currently spends RM20 billion a year in RON 95 subsidies, which means the RM8 billion in estimated savings represents a significant 40% drop.
The government has not announced the mechanism for implementing the targeted fuel subsidy programme for RON95 petrol. For diesel, Malaysians can apply for either the Subsidised Diesel Control System (SKDS) 2.0 or BUDI Madani programmes – the former designed for companies, while the latter for agricultural smallholders.
Following the implementation of the targeted fuel subsidies, Domestic Trade and Consumer Affairs Deputy Minister Fuziah Salleh said that subsidy leakages has dropped by as much as 78%.
More updates to follow.
