Two-Tier RON95 Pricing: Fairer Balanced Subsidies Approach

The government plans to introduce a fairer approach to RON95 petrol subsidies by mid-2025, aiming to ease the public’s burden. Treasury Secretary-General Datuk Johan Mahmood Merican explained that past methods of raising petrol prices and providing cash assistance have proven ineffective.

He cited, under Tun Abdullah Ahmad Badawi’s administration cash payments of over RM600 were given to eligible citizens. While well-intended, this move caused dissatisfaction, especially among vulnerable groups, as cash aid often failed to address the actual fuel cost burden.

He emphasized the need for a system that adjusts subsidies based on usage levels, calling it a fairer approach that can reduce dissatisfaction.

Minister of Economy, Rafizi Ramli recently announced the government has in principle agreed for a two-tier RON95 pricing system. This system aims to avoid sudden price hikes, curb inflation, and can be fine-tuned over time.

Additionally, Johan also acknowledged potential challenges like fraud, operational risks, and added costs. However, he reassured that the government is committed to balancing public needs with effective subsidy management so that assistance reaches those who truly need it while maintaining economic stability.

Source: NSTP