Government Considers Two-Tier RON95 Subsidies Using Databases and E-Wallets
The government is exploring the use of databases linked to identification cards, as well as e-wallets and debit cards, as part of a two-tier pricing system for RON95 petrol subsidies.
KUALA LUMPUR: The government is exploring the use of databases linked to identification cards, as well as e-wallets and debit cards, as part of a two-tier pricing system for RON95 petrol subsidies.
Datuk Johan Mahmood Merican, the Finance Ministry’s treasury secretary-general, stated that it is crucial for the government to establish a mechanism that minimizes subsidy leakages.
“The government is dedicated to ensuring that Malaysians continue to benefit from subsidies. The specifics of the mechanism are still being refined and will need to be finalized, which is why Prime Minister Datuk Seri Anwar Ibrahim announced that implementation is expected around the middle of next year,” he said.
He made these remarks to reporters during the Post-Budget 2025 Debate organized by the Malaysian Economic Association (MEA) on Monday (Oct 21).
Also present was MEA president Yeah Kim Leng.
The dialogue was moderated by Tan Sri Sulaiman Mahbob, chairman of the Malaysian Institute of Economic Research board of trustees. The panel included Tan Sri Noor Azlan Ghazali, director of the Malaysian Inclusive Development and Management Institute, and Firdaos Rosli, chief economist at Ambank Group.
Comparing the RON95 subsidy approach to the diesel subsidy system, Johan mentioned that it might adopt elements similar to the fleet cards mechanism used in the Subsidised Diesel Control System (SKDS).
He stressed that the primary advantage of adjusting pump prices to reflect market values is the immediate reduction in subsidy leakages.
“We noticed that there were leakages following the diesel subsidy mechanism’s introduction, not only across borders but also to industries that should be purchasing at commercial rates.
“However, we observed a 30 percent drop in diesel sales at petrol stations alongside an uptick in commercial sales, indicating that both issues are being effectively addressed,” he added. – Bernama
