Govt Targets Billions In Savings With RON95 Subsidy Rationalisation

Samuel Chua

23rd September 2025 - 3 min read

The government expects to save between RM2.5 billion and RM4 billion annually through the RON95 petrol subsidy rationalisation, according to Finance Minister II Datuk Seri Amir Hamzah Azizan.

He said the estimate is based on global oil prices averaging around US$75 per barrel (approximately RM315). Savings will come from cutting subsidies previously enjoyed by ineligible groups, including instances where subsidised fuel in Malaysia was sold across the border.

The funds saved will be redirected to programmes such as the Sumbangan Tunai Rahmah (STR), the SARA initiative, and infrastructure upgrades, including improvements to schools and clinics.

Among The Cheapest Petrol Prices Globally

Amir Hamzah, who also serves as Economy Minister, stressed that Malaysia will continue to offer some of the world’s lowest petrol prices when the subsidy rationalisation begins on 30 September 2025.

“With the rate of RM1.99 per litre for Malaysians, we are still among the cheapest in the world, both regionally and globally,” he said during a press conference at Kampung Angkat Madani in Pulau Betong on 22 September.

However, he noted that final pump prices will depend on global oil markets. If international prices fall, Malaysian petrol prices will also remain low.

Monthly Quota Of 300 Litres

Each Malaysian driver will be entitled to 300 litres of subsidised RON95 per month. Amir Hamzah said studies show this is sufficient for the average vehicle, covering up to 170 kilometres of daily commuting.

“For example, someone living in Seremban and working in Kuala Lumpur or Putrajaya would fall within the 170 kilometres we estimated,” he explained.

He added that p-hailing drivers, who rely heavily on their vehicles for income, will be able to appeal for a higher quota. Approval will depend on holding a valid p-hailing licence and meeting eligibility requirements. More details on this appeal process will be announced in the coming week.

MyKad As The Key To Subsidy Access

Amir Hamzah confirmed that MyKad will be the primary identification tool for Malaysians to access the RON95 subsidy programme.

“The recipient must be a Malaysian citizen aged 16 and above. This means those who hold a motorcycle or car licence will qualify,” he said.

He explained that MyKad is already widely used for subsidy programmes such as STR, which covers over nine million individuals. Using existing infrastructure avoids the need to develop new systems, and also ensures subsidies are channelled only to Malaysians.

Preventing Abuse And Leakages

With the MyKad system, non-citizens will be excluded from the subsidy, even if they attempt to purchase RON95 in Malaysia. Vehicles registered outside Malaysia, such as those from Singapore or Thailand, remain ineligible for subsidised fuel.

“Without these measures, government spending would be wasted, when it should instead be channelled to Malaysians who truly need it,” Amir Hamzah said.

He added that MyKad also carries symbolic value, reinforcing national identity and pride. “MyKad is the key to accessing benefits like the RON95 subsidy. If someone does not have it, they are not eligible,” he said.

Data Security Measures In Place

Addressing concerns about data protection, Amir Hamzah assured that the government’s IT systems are governed by strict security regulations.

He said Malaysians understand the importance of safeguarding their MyKad, which is already linked to numerous essential services. With these measures in place, the government is confident the subsidy rationalisation beginning on 30 September can be rolled out smoothly.

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