RON95 Subsidy Takes Longer Time To Ensure Careful Execution, Avoid Affecting The People -- MOF

KUALA LUMPUR, Nov 3 (Bernama) -- The government is taking a longer time to implement the RON95 fuel subsidy rationalisation compared to other subsidies to ensure that the implementation is carried out carefully and does not negatively affect the people.

According to the Ministry of Finance (MoF) in a written reply on the Parliament website, among the factors considered include a detailed study on the implementation approach for BUDI MADANI RON95 (BUDI95) as RON95 petrol is widely used by consumers and is a significant component of household expenditure.

In addition, coordination between government agencies and oil companies, right down to petrol stations nationwide, is also being given attention, including system preparations and testing to ensure a smooth user experience, it said.

The ministry is responding to a question from Datuk Seri Dr Shahidan Kasim (PN-Arau) on the reasons the MADANI government took a long time to announce the reduction in petrol price.

It explained that the phased approach enabled the BUDI95 programme to be developed based on lessons learnt from the successful implementation of the BUDI MADANI Diesel programme last year.

“This approach enables the government to improve and strengthen the targeted subsidy mechanism to be more efficient and effective, while delivering benefits to the people through the reduced subsidised RON95 price of RM1.99 per litre.

“Since 2023, the government has implemented various subsidy retargeting measures gradually, including subsidies for electricity, chicken and egg price flotation, targeted diesel subsidy, and electricity tariff restructuring,” the MoF added.

It further said that these measures are implemented with the objective of sustaining the national economy, reducing leakages from smuggling of subsidised goods, and ensuring that the subsidy benefits are channelled to groups that are truly eligible. 

The ministry said the government also emphasised gradual approach to ensure savings are achieved without burdening the ordinary people.

“As a result of this approach, the 2024 inflation rate was contained at 1.8 per cent compared to 2.5 per cent in 2023, while in the third quarter of 2025, the rate further declined to 1.3 per cent,” it said.

-- BERNAMA