RON95 Subsidy: Rafizi Rules Out Vehicle Ownership, Cash Transfers

The proposed levy system for the implementation of the targeted fuel subsidy mechanism for RON 95 petrol could exclude some members of the B40 group from receiving aid, according to Economy Minister Rafizi Ramli. This is because approximately 40% of households do not have their vehicles registered with the road transport department (JPJ) under their own names, and in some cases, a family may share a motorcycle under a single registration name.

Similar difficulties were mentioned by Rafizi when addressing diesel subsidies, as people occasionally register cars under other people's names, resulting in data inconsistencies. Therefore, he said, relying solely on vehicle registration data may result in a large number of intended subsidy recipients being excluded.

Speaking about the government's plans to impose a petrol levy on cars when drivers renew their road tax, the minister stated that the levy system is one of three options under consideration and that Putrajaya currently believes the two-tier pricing structure is the most effective approach.

According to a previous report by FMT, the Federation of Malaysian Consumers Associations (Fomca) stated that the incoming targeted subsidy program's two-tier pricing structure for RON95 fuel ought to be connected to vehicle registrations rather than identity cards.

Saravanan Thambirajah, the CEO of Fomca, echoed Shahril Hamdan, a former Umno man, who stated in a Keluar Sekejap podcast episode that an IC verification system would be vulnerable to misuse.
According to Rafizi, the third proposal called for paying qualified individuals directly in cash. However, there were worries that this could result in inflation and higher prices for goods because traders would use rising fuel prices as a justification to raise prices.

Rafizi noted that there is no ideal way to implement the fuel subsidy system and that the government will ensure that the chosen approach won't result in a sharp rise in the cost of goods. This comes after Prime Minister Datuk Seri Anwar Ibrahim announced the restructuring of the RON 95 petrol subsidy in mid-2025 and the switch to a targeted subsidy.