Targeted RON95 Subsidy Should Proceed Despite Tariffs - Economist

During a special parliamentary session recently, several MPs called on the government to delay the planned RON95 subsidy rationalisation due to global economic instability from US tariffs.
They warned that changing fiscal policy now could damage the economy by lowering business confidence, increasing prices, and negatively affecting consumers.


However, Putra Business School economist Ahmed Razman Abdul Latiff believes the government does not need to delay the implementation of targeted RON95 fuel subsidy despite concerns about potential impacts from US reciprocal tariffs.

He argues that with 85% of Malaysians still eligible for discounted RON95, the subsidy rollout should proceed. Furthermore, Latiff told FMT that the government savings could be directed towards assisting businesses affected by the US tariffs.

“As for electricity tariffs, the government can implement fiscal initiatives to support the affected industries,” he says.

Prime Minister Anwar Ibrahim announced a targeted RON95 fuel subsidy during the 2025 budget tabling last year, aiming to reduce government energy spending while protecting lower-income citizens.


Anwar assured that the upcoming RON95 subsidy rationalization will not affect low-income groups. He stated the policy adjustments aim to minimize negative impacts on most Malaysians.

Source: FMT.