Targeted RON95 subsidy savings slashed from RM8b to RM2.5-4b

The government’s decision to change course and give RON95 subsidies to all Malaysians - and at six sen less per litre - instead of its original plan of cutting off the top 15 percent of income earners has put a damper on projected savings.

Up until August, the government had maintained that estimated savings from targeted RON95 subsidies would be up to RM8 billion.

However, Finance Minister II Amir Hamzah Azizan said yesterday that the new projected savings under the Budi95 plan are between RM2.5 billion and RM4 billion annually, depending on crude oil prices.

The estimate is based on crude oil trading at around US$75 (RM315) per barrel. This is around the same estimate that the government had when it first came up with the original RM8 billion target in Budget 2025.

Prime Minister Anwar Ibrahim, in unveiling the new subsidy scheme yesterday, justified the shift as a recognition of the contributions of all Malaysians.

Under the scheme, all Malaysians can buy RON95 at subsidised prices up to 300 litres per month. The exception is for e-hailing drivers who can apply for a higher ceiling.

To get the subsidies, motorists must use their MyKad at the pump or use supported e-wallet apps where their MyKad has been verified.

The full rollout for the plan begins on Sept 30, with Rahmah Cash Aid recipients getting early access on Sept 28.

Foreigners driving locally registered vehicles, meanwhile, will pay full price for RON95, estimated at RM2.60 per litre.

Foreign-registered vehicles will still be limited to RON97.

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