PDAM Urged Govt To Postpone RON95 Subsidy Rationalisation

The Petroleum Dealers Association of Malaysia (PDAM) has urged the government to postpone the planned rationalisation of RON95 subsidies. Its president, Khairul Annuar Abdul Aziz says this delay is crucial until significant challenges affecting the sustainability of petrol stations are resolved.

He pointed out that the dealer profit margins, set by the automatic pricing mechanism, have remained unchanged since 2019 and are now insufficient to cover actual operating expenses.

Furthermore, he expressed his objection to the merchant discount rate (MDR) on card payments, which rises in tandem with fuel prices but does not increase dealers' per-litre profits.


“Without a margin revision, small and medium-volume station operators will face losses from the very first day of the RON95 subsidy rationalisation implementation,” he said in a statement today. “And as pump prices increase under the rationalisation, the MDR rises accordingly, but dealer commissions remain static, resulting in a further erosion of margins.” he says in a FMT report.

PDAM, representing over 4,000 fuel stations, reiterates its concerns from last year about the potential negative impacts of targeted fuel subsidies on the national petrol retail sector. 

While acknowledging the government's aim to reduce subsidy expenditure, the association voiced concern that this policy change may result in the failure of the petroleum retail sector.


Finance Minister II, Amir Hamzah Azizan, recently declared that subsidy rationalisation would commence in the second half of the year. Prime Minister Anwar Ibrahim stated that the cuts will mostly affect foreigners and Malaysia's top 5% to 10% of income earners.