Targeted RON95 Subsidy Will Be Implemented via Two-Tier Pricing – Rafizi

The government said the targeted RON95 petrol subsidy will be implemented via a two-tiered pricing mechanism.

Economy Minister YB Rafizi Ramli told Parliament on Wednesday that the targeted RON95 petrol subsidy will be implemented via a two-tier pricing mechanism, The Edge reports. This system is said to possess less risk of potential inflation than the cash transfer method currently used by the government for the targeted diesel subsidy scheme.

"The government's priority is to ensure inflation remains under control. If we used the cash transfer method, where the retail price of RON95 would fluctuate with the market, there is a risk that traders may use this as an excuse to increase prices of goods," Rafizi said during his closing speech in the Parliament yesterday.

Under this two-tier pricing mechanism, the subsidised price for the RON95 petrol will be displayed for eligible recipients, while those who aren’t qualified for the subsidy will have to pay the unsubsidised market price.

"The mechanism is currently being refined by the Economy Ministry, which will handle backend verification of eligible recipients, while the Finance Ministry will manage the frontend operations at retail stations," the Economy Minister added.

During the tabling of Budget 2025, Prime Minister YAB Datuk Seri Anwar Ibrahim announced that the implementation of the targeted RON95 petrol subsidy will take place in mid-2025. Anwar had stressed that despite this implementation, the government would still provide RON95 petrol subsidies for 85% of Malaysians, which means that both the top 15% of earners (T15) and foreigners will pay the full market price for the RON95 petrol.