PUTRAJAYA: The government is refining the mechanism for implementing a two-tiered pricing system for the targeted RON95 fuel subsidy.
Economy Minister Rafizi Ramli said the two-tiered pricing system involved those who are ineligible for the subsidy and 85 per cent of those who are eligible.
"The implementation means that the price of fuel only needs to be paid at market price by those who are not eligible for subsidies, referred to as the T15 group.
"Who the T15 are will be determined through a process. For the remaining 85 per cent of the population (who are eligible), if the current price is RM2.05, that is what they need to pay.
"This will involve two pricing tiers at petrol stations. Therefore, the mechanism needs to be discussed (for subsidy distribution) and is currently being refined for implementation, namely by the Economy Ministry and Finance Ministry and with various stakeholders, including the Petrol Dealers Association," told reporters after attending the 2024 National Statistics Day celebration and the pre-launch of Laman Statistik held today.
Present were chief statistician Datuk Seri Dr Mohd Uzir Mahidin and his deputy Nazaria Baharudin.
During the tabling of the 2025 Budget, Prime Minister Datuk Seri Anwar Ibrahim announced that a targeted subsidy plan for RON95 fuel would be introduced in the middle of next year.
He had said the savings generated by the subsidy rationalisation would be reinvested for the benefit of the public.
Anwar, who is also finance minister, had said foreigners and the 15 per cent wealthiest of Malaysians have been enjoying the current 40 per cent subsidy for RON95 fuel, which amounts to RM8 billion.
He had said the amount would be better allocated to improving education, healthcare and public transport.
Last year, the government subsidised the RON95 fuel by up to RM20 billion.
Rafizi said the mechanism for the RON95 subsidy rationalisation would be different from the one used for diesel subsidies.
He said the targeted diesel subsidy was relatively straightforward because it used the "fleet card" method.
"This is because the group receiving the subsidised price (for diesel fuel) comprises only of transport and logistics companies, so we can issue fleet cards.
"However, for the public (in regard to the targeted RON95 petrol subsidy), we have 30 million people, and we cannot give fleet cards to everyone."
Rafizi said, previously, the government considered providing cash payments.
"However, it would not involve petrol stations because it doesn't include tiered pricing.
"Therefore, it depends on how the government plans to redirect the savings. Will it be through cash payments or direct subsidies to the 85 per cent of the population.
"This is what is being discussed and refined for implementation," he said.