Malaysia RON95 Subsidy
KUALA LUMPUR – In a significant move to reform the country's fuel subsidy system, the Malaysian government has announced a new targeted subsidy plan for RON95 petrol. The new scheme, set to take effect on September 30, will see the price of RON95 lowered to RM1.99 per litre for all Malaysian citizens, a reduction from the current price of RM2.05.
This announcement, made by Prime Minister Datuk Seri Anwar Ibrahim, marks a shift from earlier proposals of an income-based subsidy. Under the new "Budi95" initiative, all Malaysians with a valid MyKad and a driver's license will be eligible for the subsidised price, regardless of their income level.
Key Details of the New Scheme:
New Price: The subsidised price will be RM1.99 per litre, effective from September 30, 2025.
Eligibility: The subsidy is available to all Malaysian citizens who possess a valid MyKad with a working chip and a driver's license.
Quota: Each eligible individual will have a monthly quota of 300 litres of subsidised RON95.
Exceptions: E-hailing drivers will be exempted from the monthly cap, with details on registration to be announced later.
Non-Citizens: Non-citizens and large companies will pay the unsubsidised market price, estimated to be around RM2.60 per litre.
Staggered Rollout: To avoid congestion, the new system will be implemented in a staggered manner. Police and military personnel can begin accessing the new price on September 27, followed by Sumbangan Tunai Rahmah (STR) recipients on September 28. The scheme will then be open to all eligible Malaysians from September 30.
Implementation and Technology:
To access the subsidised fuel, individuals will need to verify their MyKad at the petrol pump or counter using new card readers. The government has also confirmed that digital payment options, such as the Touch 'n Go eWallet and petrol company apps like Setel, will be integrated into the system, allowing for seamless verification and payment.
Economic Impact:
The move to a targeted subsidy is a key part of the government's fiscal reform agenda. The Ministry of Finance estimates that this initiative could result in annual savings of RM2.5 billion to RM4 billion, which will be redirected to other public programs and infrastructure development. Economists have largely viewed the reform positively, noting that it will help narrow the fiscal deficit while ensuring that subsidies are channeled to those who need them most. While there may be some inflationary pressure, the impact is expected to be modest.
