The removal of subsidies for RON 95 petrol should have been carried out a long time ago, as the subsidies have been enjoyed by the rich, said prime minister Datuk Seri Anwar Ibrahim.

The prime minister, who is Tambun member of parliament, said that any government when in power agreed that there was a need to implement subsidy rationalisation, but did not have the will to do so, for fear of political repercussions.

“If you ask me, subsidy rationalisation on RON 95 should have been implemented a long time ago, but it is not easy. Over 3.8 million foreigners use this petrol, [and] people who drive [Rolls-Royce luxury vehicles] also use this petrol that we subsidise. So how do we solve this [matter]? It’s been years,” Anwar said in a Dewan Rakyat session, reported the New Straits Times.

The Malaysian government capped the price of RON 95 petrol in February 2021 to RM2.05 per litre, and the ceiling price for the fuel has remained to the present day. Meanwhile, the fuel subsidy rationalisation programme for diesel began on June 10, which is applicable to Peninsular Malaysia but the same price remains for East Malaysia.

No government in the past, or political party had opposed the subsidy rationalisation initiative, Anwar said. “When they were in government, all of them said ‘yes, it’s good, but wait, we are not ready’… [this is] because they know the political implications,” said the prime minister.

That said, there has yet to be any concrete plans for the subsidy rationalisation for RON 95 petrol, and that there has yet to be a policy paper opened on this, according to Anwar.

“I understand that maybe in terms of implementation, you can dispute. This I can accept. But all we hear now is claims that the government is ‘zalim’ (oppressive), taking away subsidies. The prime minister also did not discount the possibility of the government implementing more targeted subsidy rationalisation in the future, however its focus now is on the diesel subsidy rationalisation, he said.

Last year, the Auditor-General’s Report 2022 stated that the government spent RM45.184 billion or 81.5% on subsidising petroleum products, of the over RM55 billion in subsidies in 2022.

The diesel subsidy rationalisation plan is said to save the government around RM4 billion a year, and Malaysia spent RM14.5 billion on subsidising diesel last year. According to finance minister II Datuk Seri Amir Hamzah Azizan, the average daily sales of diesel in Peninsular Malaysia has dropped by over 30%, which was cited as proof of the diesel subsidy rationalisation’s effect.

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