Malaysia’s targeted RON95 petrol subsidy rationalisation is set to begin in the second half of 2025, using a MyKad-based verification system to ensure only eligible individuals receive subsidised fuel.
The government says the system is designed to maintain the current efficiency at petrol stations and avoid long queues at the pump.
Why is the new system introduced?
To address subsidy leakages and improve fiscal efficiency, the Malaysian government will roll out a two-tier pricing system for RON95 petrol in the second half of 2025.
Users will be required to verify eligibility using their MyKad at the fuel pump. Those who qualify will pay the subsidised price, while others will be charged the market rate.
How it works
According to Second Finance Minister Datuk Seri Amir Hamzah Azizan, the mechanism will work similarly to the existing Sumbangan Asas Rahmah (SARA) cash aid programme, which also uses MyKad as a verification tool.
He noted that over 5.4 million Malaysians have successfully used their MyKad for SARA assistance without causing congestion or delays at service points.
Amir Hamzah assured the public that the system is being designed to preserve the current convenience at petrol stations. “We do not want people lining up just to claim subsidies. The aim is to ensure the transaction remains as smooth as it is today,” he said.
The two-tier pricing system is expected to be ready for deployment across all petrol stations nationwide before the end of 2025.
Once implemented, it will differentiate fuel pricing at the point of purchase—subsidised pricing for eligible MyKad holders and unsubsidised pricing for others, such as high-income individuals and non-citizens.
Economic analysts have projected that the move could save the government approximately RM8 billion per year, while ensuring that fuel subsidies are more accurately targeted toward the B40 and M40 income groups.
Do you think Malaysia’s MyKad-based subsidy system will strike the right balance between efficiency and fairness?
With the upcoming implementation of the RON95 rationalisation plan, Malaysians are expected to see a more targeted fuel subsidy system—without long queues.
Stay tuned to TechNave.com for more updates.
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