Malaysia committed to petrol subsidy cuts in second half of 2025, says MOF
'The government will continue to assess inputs and feedback in refining details of the RON95 subsidy rationalisation as it actively engages with a wide range of stakeholders,' a ministry spokesperson said in response to questions from Bloomberg News.
Prime Minister Datuk Seri Anwar Ibrahim announced in October last year that the government would introduce a two-tier pricing system for RON95 petrol in mid-2025. Under the plan, the wealthiest 15 per cent would pay market rates, while others would continue to enjoy subsidised prices, potentially saving the government RM8 billion annually.
'The government remains committed to implementing the RON95 subsidy rationalisation in the second half of 2025 and will share further details in due course,' the spokesperson added was quoted as saying.
In March, Anwar, who is also finance minister, assured Malaysians that the planned subsidy cut would not impact 80 to 90 per cent of the population. A recent drop in global oil prices has also eased the government's path to implementing the policy.
The reduction follows a similar move last June when diesel subsidies were scaled back, boosting government revenue but coinciding with the ruling coalition's loss in a by-election.
Second Finance Minister Datuk Seri Amir Hamzah Azizan said in April that Malaysia aims to reduce its fiscal deficit to 3.8 per cent of GDP this year, down from 4.1 per cent in 2024.
The government has delayed other reforms, such as a planned expansion of the sales and service tax originally set for May 1, but electricity tariffs are still expected to rise in July.
'The overarching objective remains clear — to ensure that most Malaysians continue to enjoy RON95 at a subsidised price while addressing the leakage of subsidies to foreigners, businesses, and the highest income earners,' the MOF spokesperson told Bloomberg News.
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