RON95 subsidy up to 300 litres per month for all M'sians, no income cap

Summary

• PM Anwar Ibrahim announces all Malaysians with a valid driver’s licence can buy RON95 at RM1.99 per litre.

• Anwar says there will be a 300L per month ceiling, which e-hailing drivers will be exempted from.

The government will not be imposing an income cap on RON95 subsidies once the targeted mechanism is in place on Sept 30.

Instead, Prime Minister Anwar Ibrahim announced that all Malaysians with a valid driver's licence can buy RON95 at RM1.99 per litre.

He also clarified that there will be a 300L per month ceiling, which e-hailing drivers will be exempted from.

The prime minister said the ceiling was determined based on data from the Statistics Department, which found that the average Malaysian uses between 100 and 200L of petrol every month.

"At most, people will use up to 250L, but it still won't reach 300L - unless you have a first wife in Gombak and a second wife in Seremban," he added in jest during his monthly meeting with Prime Minister Department's staffers this morning.

Foreigners driving locally registered vehicles will pay the market price, estimated to be around RM2.60 per litre.

Foreign-registered vehicles will still be limited to RON97.

Previously, Anwar said that the"mahakaya" (rich elites) would also not be entitled to fuel subsidies.

“Some might criticise (and ask) why are the mahakaya also (getting subsidy)? Because this is a recognition of the contributions of all Malaysians (to the country),” he said today.

When tabling Budget 2025 last year, he estimated that the cost of subsidising RON95 for the top 15 percent of Malaysians, as well as foreigners, cost the government RM8 billion.

Anwar did not specify a revised estimate for the subsidy savings now that there is no income cap.

Rollout in stages

In his speech today, he said that the rollout of the targeted subsidies will be carried out in stages.

The armed forces and police will be the first to get the subsidies starting Sept 27.

This will be followed by Rahmah Cash Aid recipients on Sept 28, before a full rollout on Sept 30.

The prime minister said this is to test the system's capabilities, referencing previous troubles with the one-off RM100 Rahmah Necessities Aid (Sara).

"As we are aware, high traffic (on such systems) can lead to some (issues). As such, this time around, we were more careful with our test rate, with (the matter) brought to the cabinet and several ministers asked to test out the system (for targeted petrol subsidies).

"There might not be such a jam (during the initial testing stages), but once the number goes beyond five million (users), there might be some problems," Anwar added.

He also quipped that civil servants should not rush to buy subsidised petrol, and can do so later in early October.

The one-off Sara aid was announced for all adult citizens to purchase household goods and groceries, redeemable via MyKad from Aug 31 to Dec 31.

However, the system collapsed under heavy usage on the first day, with the government only boosting capacity the next day.

No registrations, app payment options

Despite Anwar stating the valid driving licence requirement, it is understood that only a MyKad needs to be used to get the subsidised prices.

The premier said that citizens will not have to register to qualify for the subsidy scheme, and MyKad scanners will be provided at petrol station stores and by the petrol pump to "reduce the risk of congestion".

Malaysians also have the option of paying for petrol through apps like Touch N Go and Petronas' Setel without needing a physical MyKad.

Anwar said this is because such apps have an electronic Know-Your-Customer (eKYC) digital ID verification, where uploading photos of the MyKad is required.

Citing data from the National Registration Department and Road Transport Department, he added that over 16 million Malaysians would benefit from the new price.

He also stressed that returns from the subsidy reform will go back to the rakyat via better infrastructure, including flood mitigation measures.

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