24th September 2025 - 2 min read
Two new pricing tiers for RON95 petrol will be introduced later this month, as part of efforts to ease the financial burden of fuel costs for local drivers.
The government will continue its targeted subsidy programme, allowing eligible drivers to purchase up to 300 litres of RON95 petrol per month at a subsidised rate of RM1.99 per litre. Eligible public and commercial vehicles can purchase fuel at RM2.05 per litre. Non-eligible consumers, including foreign nationals and non-eligible commercial vehicles, will pay RM2.60 per litre, based on the automatic pricing mechanism.
The Malaysian government has opted not to fully float RON95 petrol prices in order to manage inflation and prevent a rise in the cost of living. Finance Minister II, Datuk Seri Amir Hamzah Azizan, explained that the decision was made to shield the public from drastic price hikes.
According to the government’s data, the subsidy expenditure last year amounted to RM18 billion to support the consumption of 18 billion litres of RON95 petrol. This was based on Brent crude oil averaging over US$80 (approximately RM330) per barrel.
However, the price of crude oil has since fallen below US$70 (around RM290) per barrel, which has influenced the decision to adjust pricing at the pump. The government has also allocated RM11 billion for the Budi95 targeted subsidy over the next 12 months, maintaining the RM1.99 per litre price for eligible Malaysians despite global price fluctuations.
A key part of the government’s strategy is to limit subsidies to eligible Malaysian drivers and businesses. Foreigners and non-eligible commercial vehicles, who together account for about 22% of RON95 petrol consumption, will no longer benefit from the subsidy. The savings from excluding these groups will help reduce the overall subsidy burden.
Amir Hamzah also pointed out that only 0.7% of Malaysian drivers currently exceed the monthly 300-litre subsidy allocation, highlighting that the vast majority of consumers will continue to benefit from the reduced petrol prices.
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Iman writes about personal finance with curiosity. She is interested in the stories behind money, the hesitation around big decisions, and the small habits that shape financial futures. Off the clock, she is either dissecting a film or climbing her way up the leaderboard in her favourite games.
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