RON95 Fuel Subsidy Reform to Roll Out in Second Half of 2025

Big changes are coming to how Malaysians pay for fuel—specifically RON95. According to Finance Minister II Datuk Seri Amir Hamzah Azizan, the government is preparing to implement the long-anticipated fuel subsidy rationalisation by the second half of 2025.

The goal? To ensure that subsidies are more targeted, benefitting only those who truly need the financial assistance rather than being universally available to all.

Fine-Tuning Who Qualifies for Help

Speaking at the Malaysian Institute of Accountants (MIA) International Accountants Conference 2025 in Kuala Lumpur, Amir Hamzah revealed that the Ministry of Finance (MoF) is now in the crucial stage of determining eligibility criteria for the upcoming targeted subsidy rollout.

"We're committed to going ahead with the subsidy rationalisation," he explained, "but right now, our focus is on ensuring the correct recipients are identified." The Cabinet, led by Prime Minister Datuk Seri Anwar Ibrahim, is still discussing the income threshold that will define who qualifies.

Amir hinted that the eligibility bar will be raised, likely to better reflect current economic realities and to avoid overly broad distributions.

MyKad Likely to Be Key to the Rollout

One of the most practical tools on the table for managing the new targeted subsidy system is something every Malaysian already has: the MyKad. The government is considering using the national ID card to verify eligibility and facilitate distribution.

Amir noted that the MyKad had already been used successfully in other aid programs, such as the Sumbangan Asas Rahmah (SARA) initiative. Building on that success, the MoF is now working to refine the system to ensure it can handle fuel subsidy disbursements effectively and fairly.

A Major Step Toward Fiscal Reform

The move to rationalise fuel subsidies marks an important milestone in Malaysia's broader economic reform agenda. Blanket subsidies, while helpful in the short term, have long been criticised for being inefficient and expensive—often benefitting higher-income groups just as much as those in need.

By switching to a targeted model, the government hopes to reduce unnecessary spending while still protecting lower-income households from rising living costs.