KUALA LUMPUR: The implementation of diesel subsidy rationalisation is expected to provide annual savings of between RM7.2 billion and RM7.5 billion, up from the RM4 billion in savings projected last year, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
He said this is a result of better implementation of the diesel subsidy rationalisation, which saw savings of up to RM600 million per month recorded after its successful implementation.
“When we rolled out (diesel subsidy rationalisation) in July 2024, we anticipated to get about RM4 billion of savings a year. At the moment, we are tracking about RM600 million per month so that should give us about RM7.2 billion to RM7.5 billion a year (in savings).
“We are doing much better because the (diesel) leakage was much more than what we had thought, and that is only in Peninsular Malaysia at this point of time,” he said during a panelist session at the Malaysian Economic Forum (FEM) 2025 today.
Amir Hamzah noted the fundamental things to consider when implementing the diesel subsidy rationalisation was what were the key things that the government has to manage.
“We knew that for the leakages, we were going into two major segments — one, from the retail to commercial sector. Second, we also had huge leakages involving people crossing the border.
“When we put in the system that actually reduced the risk for us in terms of leakages, that’s why we were able to roll it. We got better results as we have been able to reduce cross-border leakages,” he added.
Meanwhile, Amir Hamzah highlighted that the Finance Ministry and Economy Ministry are working out the mechanism for the RON95 petrol subsidy rationalisation which is set to be implemented this year.
“We’ve said that we will be rolling out RON95 subsidy rationalisation using the same principles (as diesel rationalisation) with two-tier pricing, looking at protecting 85 per cent of the population so that they will be left untouched along the way.
“First is the (income) threshold that we cut people on. Second is the methodology, like what we have done in diesel that will allow us to effectively manage.
“So going forward, I think in the next couple of months, you will see that one clarified,“ he said.
