It’s almost June, and that supposedly means the RON95 fuel subsidy rationalisation – which was planned to impact Malaysians in the T15 income bracket – is about to begin soon. Now, according to Prime Minister Datuk Seri Anwar Ibrahim, only foreigners and ultra-rich Malaysians will be paying more for petrol, as reported by The Star.
In a speech during PKR’s National Congress, the Prime Minister stated that the fuel subsidy rationalisation will only target the ultra-rich 5% of Malaysians and foreigners.
“There was an initial proposal to raise fuel prices and then give out aid. I and the Cabinet disagreed with that proposal — we do not agree with raising fuel prices. Fuel prices can be reduced gradually depending on current market conditions,” the Prime Minister said.
“We have rejected this move. We will target the 5% who are ultra rich in Malaysia and also foreigners,” Anwar said in his winding-up address at the recent PKR national congress in Johor.
Initially, the government laid out plans to introduce the RON95 petrol subsidy rationalisation for Malaysians within a new income category, dubbed ‘T15’, comprising the top 15% earners.
According to the initial plan, the T15 earners in Malaysia will no longer qualify for fuel subsidies once the subsidy rationalisation programme begins, which was planned for mid-2025. The remaining 85% of Malaysians will still be able to enjoy subsidised RON95 petrol, as announced by the Prime Minister, during the tabling of the 2025 national budget (Belanjawan 2025) last year.
This move is expected to save the Malaysian government RM8 billion in subsidies.
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Now, though, it appears that the entire plan has been scrapped. The move could be in response to calls from the opposition for the government to postpone the RON95 fuel subsidy rationalisation, citing “uncertain economic situation” as the main reason for the deferment.
As per Minister of Economy Rafizi Ramli, the entire plan has now been handed over to the Ministry of Finance – which is also headed by the Anwar – who will be finalising the mechanism for enacting the subsidy rationalisation.
Second Minister of Finance, Datuk Seri Amir Hamzah Azizan, previously said that the MyKad will play a vital role in determining eligibility for fuel subsidies, though the Minister noted that the mechanics are still being fine-tuned.
It is still unclear how the government intends to implement the subsidy rationalisation at the fuel pumps, and how it intends to identify the top 5% earners or foreigners when purchasing fuel.
Currently, four million foreigners residing in Malaysia are collectively benefiting from approximately RM3 to RM4 billion in fuel subsidies, according to the Prime Minister.
For context, the current price of non-subsidised RON95 petrol is at RM2.57, based on fuel prices published by Double Petrol, a non-subsidised petrol station in Perlis.
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