Government Rejects World Bank’s Proposal to Hike RON95 Petrol Price

The Malaysian government has rejected the proposal made by the World Bank to float the RON95 petrol price.

The Malaysian government has rejected the proposal by the World Bank to raise the RON95 petrol price to the market price. As reported by Bernama, Prime Minister Dato' Seri Anwar Ibrahim expressed the government’s commitment to the targeted subsidy approach for RON95 petrol under the Budi Madani RON95 (BUDI 95) subsidy programme, citing that the current mechanism is a more prudent approach that has successfully reduced the government’s expenditure without burdening the people.

Prime Minister YAB Dato' Seri Anwar Ibrahim (photo credit: Anwar Ibrahim via Facebook)

“The (World Bank’s) proposal is to increase the price to RM2.65 per litre for all petrol, and then provide subsidies for certain categories. Therefore, my fellow Cabinet members and I rejected the proposal and lowered the RON95 price to RM1.99 per litre for Malaysian citizens and RM2.60 per litre for foreigners.

“This shows that our (the government’s) approach is prudent and we take actions that can benefit the people. Alhamdulillah, the targeted RON95 subsidy throughout Malaysia has received very good and positive response,” he said when tabling the Supply Bill (2026) in the Dewan Negara earlier today.

Anwar, who is also the Finance Minister (MoF), said comprehensive subsidy targeting also ensures that the majority of citizens continue to receive assistance while combating subsidy leakage to non-citizens and business use.

“When the government ended subsidies for chicken and eggs and floated their prices, the government ensured prices remained stable, supply was sufficient, and the people were not affected.

“The Malaysian government aims to target subsidies and achieve savings of around RM15.5 billion a year through the floating of chicken and egg prices, as well as the targeting of electricity, diesel, and RON95 petrol subsidies,” Anwar continued.

As detailed in the previous report, an estimated 13.9 million Malaysians have been enjoying the RM1.99 per litre RON95 price under the Budi 95 as of Nov 30 this year, or two months since its implementation. This represents more than 84% of the country’s 16.5 million eligible individuals, with a total of 2.59 billion litres of RON95 petrol consumed so far.

In addition to that, the prime minister also said that the government chose not to introduce any new taxes for Budget 2026, where it will instead improve on governance, target subsidies, and strengthen tax compliance.

Source: Bernama