The biggest news of last Friday’s tabling of Budget 2025 is possibly the impending end to blanket subsidies for RON 95 petrol, which will be replaced by a targeted version that will come into place from mid-2025. Prime minister Datuk Seri Anwar Ibrahim said that the T15 (a new term that means the top 15% earners) and foreigners will soon have to pay market price for petrol, while 85% of the rakyat will continue to enjoy subsidised RON 95.
After subsidy rationalisation for diesel was implemented in June, it was always a matter of when and not if RON 95 petrol would follow. Now we have an idea when.
Although the majority of Malaysians will continue to enjoy subsidised RON 95 petrol, which is currently pegged at RM2.05 per litre, economy minister Rafizi Ramli acknowledged that the two-tier system is likely to cause significant public backlash, although the government is ready for it.
While this plan could raise inflation and trigger price hikes, the government is prepared for the challenges ahead, Rafizi said in an interview with Bloomberg TV. “We are prepared for the choppy waters ahead,” he said, branding the move “a once-in-a-generation decision that affects everyone’s lives.”
“My hope, and our responsibility in the government, is to make sure that we manage this properly so that it is sustainable,” Rafizi said, while estimating a 12-month inflation cycle after any fuel price hike before stabilising at around 2%.
Fuel subsidy is a thorny issue that takes political will to act on. After all, Malaysians have enjoyed subsidised petrol for decades, since the early 1980s. Over the years, fuel subsidy has grown to become a huge chunk of government expenditure – last year, Malaysia spent over RM50 billion on direct fuel subsidies alone.
Zooming in on petrol, Anwar said in his Budget 2025 speech that Malaysia spends RM20 billion a year in RON 95 subsidies to maintain pump prices at RM2.05 per litre, and moving to targeted subsidies would save the government RM8 billion, which is 40% of the total sum.
Anwar, who is also finance minister, said that this money, enjoyed by foreigners and the top 15% of maha kaya consumers, would be better utilised for the improvement of educational facilities, health as well public transportation.
Rafizi said that the government could not afford further delays, as the country’s fiscal health depends on subsidy cuts and tax base expansion. Reducing the budget deficit and retaining Malaysia’s top credit score are key priorities for the government to attract investors and strengthen the economy, he added.
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remove all subsidies la, but then remove AP, excise duty and lower down import tax la, wat for double tax, triple tax or quarter tax? jangan la semua untung u kolang shj.
OK la 85% not affected
U buy car with loan 100K
2.5% interest 2.5K yearly lo
We’re the only country in the world to rollback the implementation of GST and instead implement almost 10 other taxes in its place. That’s a once-in-a-generation incompetence and stupidity that no one else has witnessed too.
Similarly, seeing a super-incompetent political opposition finally take power and being unable to fulfil any of their promises is also a once-in-a-generation phenomenon. Or maybe not, considering how many fools are still chugging their Kool-Aid non-stop.
Kudos to those who cried in their rally that their Idol King finally took the seat. Imagibe the damage they will do if taking seat much more earlier.
Let support this. The government need the money to do projects.
The projects can be given to the husbands or wives of our MPs for 3 billions each. Their family prosper, we will also prosper. Let help the government to make this possible.
It takes a brave government to make brave decisions. Country will never progress if we keep making only populist decisions
Beg your pardon? This madani gomen is a pussy. Proper reform should be fair to all and no preferential treatment. Isn’t this B85 T15 maha kaya nonsense a populist decision to keep the poor axx voter base happy?
make sure you are ready to be voted out in the next GE too. Rakyat’s backlash comes with strong actions too.
Once in a generation backlash for Madani govt…Vote out En,Surprise Rafizi, and the worst performing menteri..Education dude.
And perhaps a new PM from PKR.No experimentation with greenies.During covid lockdown,they have the Jana Wibawa scandal.
And dont forget to kick out the trojan horses in MADani coalition.
When is the next GE?
What crime should I frame PMX with when I become PMXI?
Tell me how much the government receives dividend from Petronas and how much the government spends on ‘subsidising’ fuel.
Also, I am more concerned about having too many government servants and 80% of them just having gaji buta but enjoy 15% pay increment
This. 1000% this. But you know…need to keep the peeps employed…or else havoc. Will never fix the own time own target crowd lah.
Also subsidy fuel is one thing. Gomen also collect cukai on every litre of fuel sold.
No politicians would dare trim the bloated gomen service and risk a revolt from the majority
Petrol consumption pollutes the atmosphere and comes back to harm us in the long term in the form of more severe storms, flooding, longer heatwaves and disruption in food production. So it’s appropriate that we disincentivise its consumption.
I mean, you’re not wrong, but there needs to also be a stopgap in place and not just act like ripping off the band-aid without a backup plan is the way to go.
If remove RON95 subsidy, u shud remove car taxes too. currently ppl finance the soo called subsidy by paying upfront high taxes (excise la, import la, SST la…) when u buy a car! what subsidy actually? there’s none
Azmin Ali for PMXI!
Previously you promised us different thing..now when you have power you promised us with totally different thing..are you a chameleon?