MOF: Govt committed to 2025 petrol subsidy cut but no fixed date yet - Auto News | Carlist.my

As Malaysia forges ahead with its pledge to gradually phase out petrol subsidies in the second half of this year, the government remains resolute in its commitment to carefully consider all relevant input and feedback to ensure the implementation of its subsidy revamp plan is well thought out and aligned with the needs of the populace.

According to a spokesperson from the Ministry of Finance (MOF), the government is actively engaging with a diverse array of stakeholders, from industry leaders to consumer advocacy groups, to glean insights and refine the details of its fuel subsidy reform, while closely monitoring the potential impact of US tariffs on the country's economic landscape.

Last year, Prime Minister Anwar Ibrahim said that the government would cut petrol subsidies in mid-2025, a move that he believed could help the government save RM8 billion a year. 

 Policymakers are planning a two-tier price system for RON95 petrol. Anwar said then that only the wealthiest 15% would pay the market rate for it, while the rest will enjoy the current subsidised price.

“The government remains committed to implementing the RON95 subsidy rationalisation in the second half of 2025, and will be sharing further details in due course,” the spokesperson said.

In an effort to allay the misgivings of Malaysians, Anwar recently cited a government study which revealed that the proposed fuel subsidy reduction would only affect a relatively small proportion of the population - a mere 10% to 20% - thereby assuring the majority of citizens that their quality of life would remain largely unaltered.

This optimistic outlook was further bolstered by a recent decline in global oil prices, presenting a favorable opportunity for policymakers to proceed with the politically delicate task of reforming fuel subsidies without incurring undue backlash. However, the looming threat of US tariffs on Malaysian goods, sparked by

In April, second Finance Minister Amir Hamzah also added that the government is confident of achieving its target to narrow the budget gap to 3.8% of gross domestic product this year from 4.1% in 2024. 

Policymakers are seeking to ensure that the implementation of the petrol subsidy cut is “as smooth as possible for Malaysians and effective in meeting its objectives”, the MOF spokesperson said. 

“The overarching objective remains clear — to ensure that most Malaysians continue to enjoy RON95 at a subsidised price while addressing the leakage of subsidies to foreigners, businesses and the highest income earners,” the spokesperson said as quoted from Bloomberg.

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