KUALA LUMPUR — The rationalisation of RON95 petrol subsidies is expected to be implemented in the second half of 2025, with the government currently working to identify eligible recipients using data from existing aid schemes such as the Sumbangan Asas Rahmah (SARA) programme.
Second Finance Minister Datuk Seri Amir Hamzah Azizan said the Finance Ministry (MoF) is refining mechanisms to ensure that subsidies are channelled to the appropriate segments of society, with a particular focus on excluding foreign nationals and high-income earners.
“MoF will proceed with the subsidy rationalisation, but for now, the priority is to ensure that the right recipients are identified.
“Prime Minister Datuk Seri Anwar Ibrahim, together with the Cabinet is discussing the eligibility threshold for Malaysians, where the qualifying level to receive subsidies will be raised,” he said at the Malaysian Institute of Accountants (MIA) International Accountants Conference 2025.
Amir noted that the government intends to adopt the MyKad system as the main identifier for subsidy eligibility — an approach already in place under the SARA initiative, which he described as effective.
“We are currently strengthening the system so that we can use it for the implementation of the RON95 fuel subsidy,” he added.
The move aligns with broader fiscal reforms laid out during the tabling of Budget 2025, in which Anwar, who also serves as Finance Minister, confirmed that targeted subsidies for RON95 would begin mid-year.
Last week, Economy Minister Datuk Seri Rafizi Ramli said his ministry had officially handed over full responsibility for the fuel subsidy restructuring to the MoF, indicating that implementation is drawing near.
“The decision on targeted RON95 subsidies has been entirely handed over to the Ministry of Finance. That is a Cabinet decision.
“The Ministry of Economy has presented the matter four times to the Cabinet. We are now waiting for the next steps from the Ministry of Finance, which will oversee the entire process from here on,” Rafizi said.
This transition reflects a centralised approach in reconfiguring Malaysia’s subsidy system, a key part of the government’s fiscal consolidation strategy.
At a separate event on Saturday, Anwar reiterated that RON95 prices for Malaysians would remain unchanged for now, while confirming that fuel subsidies would no longer benefit foreign nationals or the ultra-wealthy.
“We are now thinking about targeting fuel subsidies. There was an early proposal to raise fuel prices and then provide aid. I and the Cabinet did not agree.
“We do not agree with raising fuel prices. Prices can be lowered gradually depending on current market conditions, but fuel prices must be increased for foreigners,” he said at the Johor PKR Congress 2025.
Anwar pointed out that foreigners — estimated to number between 3.5 and 4 million — are costing the country up to RM4 billion in subsidised fuel.
“So if we withdraw the subsidies, anyone wanting to buy petrol might just need to show their identification card. There will be detailed mechanisms to consider,” he added.
He also criticised opposition lawmakers who he said were defending the interests of the ultra-rich and foreign vehicle owners.
“These Opposition MPs have become spokespersons for the super-rich, for people who own Rolls-Royces — and then ask PAS MPs to defend them.
“Because others are not affected. I guarantee that no one in this hall will be affected by fuel subsidy targeting — unless there are foreigners here. Any Bangladeshis in this hall? If there are, then yes, they will be affected.”
The Prime Minister further hinted that similar reviews will be carried out for subsidies on gas and liquefied natural gas (LNG), particularly after feedback from small-scale businesses and farmers.
“Likewise, on subsidy realignment — Malaysia is the country with the highest level of subsidies, I mentioned this yesterday. But just like with electricity, 85% [of people] are not affected.
“But perhaps our communication has been weak,” he admitted, adding that the government must improve how it conveys policy changes to the public.
In tandem with the fuel subsidy reform, Anwar also alluded to upcoming evaluations of the recently launched e-Invoice system as part of efforts to curb revenue leakage.
Meanwhile, on the sidelines of today’s conference, Amir said the ongoing Asean summit presents an opportunity for regional leaders to address pressing issues such as US tariffs following the expiry of a 90-day window.
“I’m sure the tariff issue will be raised, whether at the bilateral level or during leaders’ meetings,” he said.
Amir also reaffirmed Malaysia’s commitment to resolving the Myanmar crisis and expressed hope for stronger cooperation between Asean, the Gulf Cooperation Council (GCC) and China to build a more resilient. - May 26, 2025
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