Targeted RON95 subsidy should be based on vehicle type, says expert

The government has been urged to implement the targeting of RON95 petrol subsidies based on vehicle type rather than household or individual income.

According to Universiti Kebangsaan Malaysia’s Malaysian Inclusive Development and Advancement Institute (Minda-UKM) director, Professor Tan Sri Dr Noor Azlan Ghazali, the concept is similar to vehicle classification for toll payments on highways.

He further added that, in the context of petrol subsidies, the classification should be based on vehicle engine capacity.

“It is common for those with low incomes to use motorcycles as their daily transport, while wealthier individuals tend to use vehicles with larger engine capacities.

“If a wealthy person uses a Perodua Kancil, they should qualify for the subsidy because they consume less fuel.

“Of course, there will be some leakage in every classification, but it can be minimised,” he said at a special press conference on the 2025 Budget on Thursday.

Prime Minister Datuk Seri Anwar Ibrahim, announced in the 2025 Budget on Friday that the targeting of RON95 petrol subsidies is expected to be introduced by mid-2025.

Additionally, he stated that the government is advised to assist the underprivileged through alternative methods without disturbing market prices.

“I prefer to maintain market prices, and we cannot live in a state of denial.

“If we continue to suppress prices at a low level for an extended period, it will create a burden.

“If a war occurs in the Gulf countries, it will certainly lead to an increase in petrol prices; the public needs to be informed, and the government must provide assistance through alternative methods without interfering with market prices,” he said.