Two-Tier RON95 Subsidies May Use Databases

KUALA LUMPUR: The government is looking into employing databases tied to identification cards, in conjunction with e-wallets and debit cards, as part of a two-tier pricing mechanism for RON95 petrol subsidies.

Datuk Johan Mahmood Merican remarked that it is crucial for the government to establish a mechanism that curtails subsidy leakages.

“The government remains steadfast in ensuring that all Malaysians benefit from subsidies. The details of this mechanism are still under development, which is why Prime Minister Datuk Seri Anwar Ibrahim announced that we anticipate implementation around mid-next year,” he said.

He shared these insights with reporters during the Post-Budget 2025 Debate organized by the Malaysian Economic Association (MEA) on Monday (Oct 21).

MEA president Yeah Kim Leng was also present.

The dialogue was moderated by Tan Sri Sulaiman Mahbob, chairman of the Malaysian Institute of Economic Research board of trustees. The panel featured Tan Sri Noor Azlan Ghazali, director of the Malaysian Inclusive Development and Management Institute, and Ambank Group chief economist Firdaos Rosli.

Johan compared the RON95 subsidy system to the diesel subsidy mechanism, suggesting that it may adopt elements similar to the fleet card system utilized under the Subsidised Diesel Control System (SKDS).

He emphasized that having the pump price reflect the market price is beneficial, as it immediately results in reduced leakages.

“We observed leakages following the diesel subsidy mechanism’s introduction, not only across borders but also affecting industries that should be purchasing at commercial rates.

“However, we recorded a 30 percent decrease in diesel sales at petrol stations, coupled with an increase in commercial sales, indicating that both issues are being effectively managed,” he noted. – Bernama