RON95 subsidy reforms may start this month, 30 sen hike to RM2.35 can save govt RM4 billion – economist

RON95 subsidy reforms may start this month, 30 sen hike to RM2.35 can save govt RM4 billion – economist

With subsidy rationalisation for diesel done and deemed a success by the government, the question on everyone’s lips is when is the turn of RON 95 petrol? That’s the big one that will affect most of us, and so far, the government has been tight-lipped on the timeline. Expect a last minute announcement, as per diesel.

They might not have the luxury of time though. Citigroup’s chief Malaysian economist Wei Zheng Kit said this week that Malaysia’s fiscal spending in the first five months of 2024 reached 53.9% of the full-year target, surpassing the year-to-date spending levels of previous years. And to meet the country’s deficit target, things need to be done.

As such, fuel subsidy rationalisation for RON 95 petrol might happen as soon as this month, he told Bloomberg.

RON95 subsidy reforms may start this month, 30 sen hike to RM2.35 can save govt RM4 billion – economist

According to the business publication, Malaysia’s budget deficit was 5% of GDP last year and prime minister Datuk Seri Anwar Ibrahim aims to bring the figure down to 4.3% by removing blanket subsidies, in a bid to attract more investments into the country.

Last year, Malaysia’s allocation for subsidies was around RM81 billion, and the bulk of it went to fuel subsidy to keep RON 95 at RM2.05 per litre and diesel at RM2.15 per litre. It is said that subsidy rationalisation for diesel could save the government RM4 billion per annum.

Citi estimates that the government can save an additional RM3 billion to RM4 billion this year if a 30 sen per litre increase for RON 95 is implemented this month, taking the pump price to RM2.35 per litre. This assumes a gradual increase to market price, and not a big overnight jump.

RON95 subsidy reforms may start this month, 30 sen hike to RM2.35 can save govt RM4 billion – economist

However, that’s merely the economic side of things, and there’s always a political side as well. Some analysts believe the RON 95 subsidy cuts may only be carried out towards the end of 2024. Anwar has said that the government’s current focus is to ensure the smooth implementation of diesel subsidy following a 56% price hike last month that courted public backlash.

It’s never easy to remove subsidies, and the PM has admitted so. “Targeted subsidies are hard to implement. If you ask me, we should have done it for RON 95 a long time ago, but it’s not easy,” he was quoted as saying.

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Danny Tan

Danny Tan loves driving as much as he loves a certain herbal meat soup, and sweet engine music as much as drum beats. He has been in the auto industry since 2006, previously filling the pages of two motoring magazines before joining this website. Enjoys detailing the experience more than the technical details.

 

Comments

  • TinKosong on Jul 03, 2024 at 12:51 pm

    In dia formula sotong…

    Like or Dislike: Thumb up 10 Thumb down 0
  • Regime change..A clear and present danger on Jul 03, 2024 at 1:35 pm

    Aug 31…Merdeka
    Sept 1…Rm5.00/litre petrol. A nuclear device was detonated in Ukraine.Oil price shot up worldwide.
    Jan 1 ,2025….Regime disintegrated.Coalition partner broke away.New elections ….
    Is this a myth or ADUAN RAKYAT leading to new regime ?
    Anything is possible.Dont take the rakyat for granted by announcing all these “surprises”.

    Like or Dislike: Thumb up 11 Thumb down 5
  • @NotBruceWayne on Jul 03, 2024 at 2:17 pm

    cut down MP’s allowances can save even more.

    Like or Dislike: Thumb up 30 Thumb down 2
  • Bangkok on Jul 03, 2024 at 2:19 pm

    If someone from bkk comes here everything suddenly seems so cheap, cars, house, food, fuel everything

    Like or Dislike: Thumb up 7 Thumb down 0
  • paulchan on Jul 03, 2024 at 2:38 pm

    it is time to remove the TONGKAT.
    TONGKAT adalah masalah kelemahan rakyat.
    Buang Tongkat!

    Like or Dislike: Thumb up 17 Thumb down 2
    • History Bender on Jul 04, 2024 at 12:07 pm

      No TONGKAT then the rich will make modern slavery of the poor & downtrodden! We will regress as a nation back to the Age of Slave Ownership!

      Like or Dislike: Thumb up 12 Thumb down 0
    • whats tongkat

      Like or Dislike: Thumb up 1 Thumb down 0
      • Tonga on Jul 06, 2024 at 9:50 pm

        The miracle herb to boost vitality also known as “Tongkat Ali”. This is a real thing and not a joke. Don’t play play, know or not.

        Like or Dislike: Thumb up 2 Thumb down 0
        • Tripod on Jul 09, 2024 at 5:56 pm

          It’s a herb or walking stick the poor uses to help them stand. Without it they’ll fall flat on their faces

          Like or Dislike: Thumb up 1 Thumb down 0
  • Lawless on Jul 03, 2024 at 3:21 pm

    Aiya…straight away chop it off la…why still need to subsidise us…we just a taxpayer foreigner to this beloved country…i prefer u to save that money for your coming election campaign.

    Like or Dislike: Thumb up 11 Thumb down 1
  • sabahan on Jul 03, 2024 at 3:54 pm

    was wondering…. where do all the AP import duties went? excise duty? could you throw those duties and implement something else targetting the luxuries cars?

    Like or Dislike: Thumb up 9 Thumb down 0
  • Lala Land on Jul 03, 2024 at 4:52 pm

    Once a liar, always a liar. We’ll see what God has in store for you and your ministers. You all lied to win.

    Like or Dislike: Thumb up 19 Thumb down 2
  • Wood powered car on Jul 03, 2024 at 6:28 pm

    Gov always say we do this save this much billion, that much billion. Never actually see any significant change. Whats the point

    Like or Dislike: Thumb up 16 Thumb down 0
    • Pro-Palestine on Jul 04, 2024 at 9:24 am

      Biasa lah. Sistem electoral democracy ma. Penting tu janji dan cakap kosong. Kerja lain cerita. Siap pandai cakap boleh jadi PM. Sistem barat ma. Kalau kita guna sistem lain, orang barat mana boleh maintain nombor satu? Mesti dia mau kita ikut sistem bodoh mereka ma

      Like or Dislike: Thumb up 2 Thumb down 0
      • Rakyat Malaysia on Jul 04, 2024 at 2:58 pm

        Too bad the only PM that did work is now in jail but hopefully he will get 2nd pardon and immediate release just like PMX. We cannot double standard not allow him free right?

        When PM Najib is back and running the country with a pure BN Gomen with full rakyat support, he will start by lowering the PH cekik darah taxation thru a lower 6% GST to replace 8+10% SST, then direct payments of cash to B40 via BRIM2.0, then inflation will be lower when our RM rises back to RM 2.5 per USD, with a stronger ringgit there will be less reasons for foreign cars to come take our subsidised petrol so there continue to have cheaper petrol for our rakyats, with a stable gomen back on track to high income more investments will flow and this brings more professional jobs for educated rakyats then they no more need to leave the country to work, this helps to bring more prosperity & happiness to all rakyat when everyone has jobs and money in their bank accounts.

        We can’t wait for the day to kick out useless PH Gomen & PMX into Klang River which they repolluted after Najib has cleaned it up! Rakyat was truly senang under PM Najib now we regret putting him down.

        Like or Dislike: Thumb up 15 Thumb down 16
  • Msia Patriot on Jul 03, 2024 at 10:30 pm

    Gomen should start cutting their useless govt staffs…. We have the highest ratio of govt staff per rakyat ….

    plus all the perks and freebies to them…. gomen is like the biggest charity foundation.

    Like or Dislike: Thumb up 19 Thumb down 4
    • Gomen servants on Jul 05, 2024 at 9:33 pm

      Tak suka boleh balik (insert country of origin). Duk maresya buatpe?

      Like or Dislike: Thumb up 2 Thumb down 1
  • cfuuting on Jul 04, 2024 at 8:08 am

    I repeat if tomorrow we take over the government the price of petrol will come down and tolls will be abolished. I repeat. I repeat. I repeat

    Like or Dislike: Thumb up 14 Thumb down 2
  • Idiot government on Jul 04, 2024 at 8:24 am

    Common…just remove pencen

    Like or Dislike: Thumb up 6 Thumb down 2
  • Ben Yap on Jul 04, 2024 at 10:21 am

    remove multiple pensions from these politicians and use the money for better cause. with the lucrative payout, a lot of self-serving politicians will do anything to stay in power.

    Like or Dislike: Thumb up 9 Thumb down 1
  • Yeong King Hui on Jul 04, 2024 at 9:53 pm

    All rubbish talk on isolated tale instead of an overall landscaping from car’s taxation,duties tolls to fuel subsidy.Just look at Thailand and you will know what is happening to us is unfair

    Like or Dislike: Thumb up 2 Thumb down 1
  • Mohd. Kamil on Jul 05, 2024 at 1:07 am

    Insurance and road tax for one year.

    Like or Dislike: Thumb up 2 Thumb down 0
  • Ollie on Jul 05, 2024 at 10:45 am

    People need to understand economics, lower subsidies means more money for capital investments, attracting more investment, country grows, jobs grow, income rise, good. However, govt needs to clean up corruption starting with macc. Same time, give direct cash to b40 to control the impact. Very difficult for the country if people are addicted to inefficient subsidies and don’t understand that the Cayenne owner is getting more subsidies vs the kapcai rider

    Like or Dislike: Thumb up 5 Thumb down 2
    • Cayenne owner on Jul 05, 2024 at 9:37 pm

      The rider don’t pay income tax so he can’t komplen coz he’s riding a stolen kapchai. Criminals don’t have a place in this country

      Like or Dislike: Thumb up 2 Thumb down 0
  • I am fine with Rm2.35 as long as there is 60% less vehicles on the road. I want to see less vehicles during peak hours, and that will never be achieved with cheap fuel, now roads are jammed regardless of peak or non-peak it is ridiculous – parents buy each children a car before they graduate from college/uni, graduates buy car FIRST before getting a job, people drive here and there during hot days just to ‘enjoy car air-con’, Malaysia is out of control with car ownership. And when Government raise fuel prices, you jump.

    Like or Dislike: Thumb up 8 Thumb down 1
  • Ini Kali la!

    Like or Dislike: Thumb up 1 Thumb down 0
  • Kenapa semua perkara yang diberi kepada masyarakat dikira rugi????? Tak beri kepada masyarakat menguntungkan kerajaan berbilon ringgit????

    Like or Dislike: Thumb up 1 Thumb down 0
  • Easy they do the job….sell Malaysian companies, cut subsidies, increase the taxes, increase the price of goods and services, increase the import duty, sell the country, then they will get the money

    Like or Dislike: Thumb up 1 Thumb down 0
  • Easy they do the job….sell Malaysian companies, cut subsidies, increase the taxes, increase the price of goods and services, increase the import duty, sell the country, then they will get the money to increase their salaries

    Like or Dislike: Thumb up 0 Thumb down 1
  • Moomoo on Jul 06, 2024 at 10:57 am

    You are the one vote for pkr and dap, why crying now? Must be happy maa

    Like or Dislike: Thumb up 1 Thumb down 0
  • sembang on Jul 06, 2024 at 12:03 pm

    That’s what you have voted for lol

    Like or Dislike: Thumb up 1 Thumb down 0
 

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