Prime Minister Datuk Seri Anwar Ibrahim has confirmed that the government will proceed with the RON95 fuel subsidy rationalisation, describing it as an important move for the country. He said most Malaysians will not be affected by any price changes, and urged the public not to be misled by inaccurate claims.

“There are a lot of negative campaigns about RON95… and I would like to reiterate that there’s no issue of the RON95 increase affecting 85 to 90% of our people. So that must be made very clear,” he said after officiating the Energy Asia 2025 event. 

Anwar also took aim at the opposition, accusing them of trying to paint a bleak picture of the government’s subsidy rationalisation plan.

“Whatever the opposition says is just a desperate gimmick to show that people are facing hardship. There is more negative news from them when we need encouraging news to propel our economy,” he said.

He said the rationalisation plan will help the government focus its spending on more targeted areas such as financial aid for lower-income households, improving public healthcare, and raising the standard of education. Anwar added that the country needs to focus on progress and development to move the economy forward.

The plan to rationalise RON95 subsidies was previously announced by Finance Minister II Datuk Seri Amir Hamzah Azizan, who said the rollout will take place in the second half of this year. He also said the ministry is currently working on identifying which groups should be eligible for continued support.

On 3 June, the Petroleum Dealers Association of Malaysia called on the government to delay the implementation. Its president, Datuk Khairul Annuar Abdul Aziz, said two unresolved issues could affect the sustainability of petrol station operators, particularly those running small or medium-sized stations.

One of the issues involves the Automatic Pricing Mechanism, which has not been revised since 2019 and no longer reflects current operational costs. The other concern is the Merchant Discount Rate, which continues to reduce already narrow margins for station owners. The association, which represents around 4,000 stations nationwide, warned that without changes, the new subsidy model could put many operators at risk.

Despite the concerns, the government has given no indication of delaying the plan. Work is still ongoing to ensure that subsidies are targeted to those who genuinely need them.

(Source: NST) 

Insider Insights

“There’s a lot of noise around RON95 lately but the government has said 85-90% of Malaysians won’t be affected. We should hold them to that promise, and not reject reform just because it’s politically unpopular. Governments globally are under more pressure than ever to cut their borrowing. Subsidy rationalisation is essential if we want the Malaysian economy to grow sustainably.” – Siew Yuen Tuck, Group CEO, RinggitPlus.

“There’s a need for clarity on how the targeted subsidy will be implemented, especially regarding how the government intends to identify eligible recipients (e.g., using MyKad) and how it will work at petrol pumps. Will there be any chance of abuse from the groups that aren’t supposed to be entitled to the subsidy?” – Luqman Noor, Credit Cards Vertical Manager, RinggitPlus.

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• Datuk Seri Anwar Ibrahim
• RON 95 Subsidy
• RON95
• Subsidy