RON95 subsidy revamp to follow diesel model with IC-linked eligibility system
Finance Minister II Datuk Seri Amir Hamzah Azizan said the mechanism, now in development, is designed to ensure subsidies reach only those who truly need them while curbing leakages and misuse that have long strained public finances.
Speaking at the Invest Asean-Malaysia 2025 conference, Amir Hamzah said the government's broader strategy for subsidy rationalisation balances fiscal discipline with social protection.
"Using diesel as an example, our ultimate objective has been to ensure that those who need support are adequately protected," he said. "For instance, we provide direct cash transfers of RM200 monthly to eligible individuals who meet income criteria and do not own expensive vehicles."
The diesel subsidy reforms, which prioritised lower-income individuals and key industrial sectors, have already begun to show results.
As of June 10, diesel supply figures dropped from 287,000 tonnes to 285,000 tonnes, an outcome the minister attributed to the elimination of improper access and disincentivising commercial abuse of subsidised fuel.
Amir Hamzah said a similar model will underpin the RON95 rationalisation expected in the second half of 2025, with safeguards to ensure smoother distribution and minimal disruption for eligible users.
He pointed to the government's Sumbangan Asas Rahmah programme, which supports 5.4 million beneficiaries, as a successful example of targeted assistance that could serve as a reference point.
"The philosophy is simple," he said. "If you're not eligible, you should pay the full price. Businesses or individuals like foreigners who can afford it should not benefit from subsidies meant for the underprivileged."
He also said the government is mindful of the potential inflationary impact of subsidy changes and is working to mitigate knock-on effects by supporting logistics operators and other affected segments.
Ultimately, Amir Hamzah said the reforms are designed to improve efficiency, reduce wastage and ensure fairness in the subsidy system.
"We want mechanisms that are both efficient and equitable," he said, adding that the future of Malaysia's subsidy framework will rely on strong systems, data-driven verification and public trust.
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