KUALA LUMPUR (Oct 18): The government will start implementing targeted subsidies for RON95 petrol in mid-2025, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim unveiled in his Budget 2025 speech.

Anwar said that the government remains committed to providing subsidies for 85% of the population.

“To avoid confusion, I would like to reiterate that the subsidy burden will continue for 85% of the population. This means that the government will continue to bear an estimated RM12 billion in subsidies for the needs of 85% of the population,” Anwar said in his Budget 2025 speech in the Dewan Rakyat on Friday.

“The undeniable fact is that foreign nationals and the top 15% of ultra-wealthy users were enjoying 40% of the RON95 petrol subsidy, valued at RM8 billion. 

“It should be reminded that this RM8 billion could be better utilised for improving educational, healthcare and public transportation facilities,” said Anwar.

The government’s RON95 subsidy bill amounted to RM20 billion in 2023, according to him. 

Currently, the price of RON95 petrol in Malaysia stands at RM2.05 per litre, significantly lower than neighbouring countries, such as Thailand at RM5.85, Indonesia (RM3.38), Singapore (RM9.02), and Saudi Arabia (RM2.66).

The rationalisation of fuel subsidies was first announced by Anwar when he tabled Budget 2024 last year. Malaysia commenced the exercise by shifting from blanket to targeted diesel subsidies in Peninsular Malaysia from June this year. However, Sabah, Sarawak, and Labuan were exempted from the move.

The diesel price in the peninsula currently stands at RM2.95 per litre, compared with RM2.15 per litre in the Borneo states.

Touching on the targeted diesel subsidy, Anwar reiterated that it is expected to save up to RM4 billion per year.

“Since its implementation, the sale of subsidised diesel has decreased by 30%, saving over RM600 million per month, even though subsidies are still provided for public transportation, fishermen, and the logistics sector,” he said.

The targeted diesel subsidy has also proven successful in curbing leakages due to smuggling and use by ineligible business sectors, according to Anwar.

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