CIMB Research is viewing positively the government’s decision to reduce the price of RON95 to RM1.99 per litre, as the subsidy applies to all Malaysians.
PETALING JAYA: Malaysia’s new targeted fuel subsidy scheme is set to reshape household spending patterns, car ownership trends, and sectoral earnings across the economy, with ripple effects expected in both the near term and longer horizon.
Investors are already weighing which industries stand to benefit most as the government prepares to launch the Budi Madani RON95 (Budi95) framework on Sept 30.
CIMB Research is viewing positively the government’s decision to reduce the price of RON95 to RM1.99 per litre, first announced on July 23, as the subsidy applies to all Malaysians rather than excluding the top income group as earlier indications had suggested.
It noted that a fresh element is the 300-litre monthly cap, which could cover up to 170km of daily commuting for cars.
The brokerage estimates that the government could save up to RM4bil annually, with the funds redirected into Sumbangan Tunai Rahmah (STR), Sumbangan Asas Rahmah (Sara), and infrastructure development.
For the automotive industry, CIMB Research said: “The policy sustains affordability for the majority of drivers, supporting demand for mass-market internal combustion engine (ICE) vehicles from national brands like Proton and Perodua, as well as entry-level Japanese marques.”
However, it cautioned that heavy users may face higher effective fuel costs once they exceed the 300-litre cap, this could accelerate the adoption of hybrids and electric vehicles (EVs).
In this respect, Proton’s e.MAS 7 EV, Perodua’s upcoming debut EV, and Sime Darby Bhd
’s expansion in premium EVs are viewed as structural beneficiaries.
The consumer space is another key gainer.
“Assuming full utilisation of the 300-litre monthly allocation, we estimate savings of up to RM18 per month per consumer,” said CIMB Research.
“While the absolute quantum may not be substantial, the subsidy provides additional disposable income that can be channelled toward daily necessities, reinforcing near-term spending on essentials and value-based retail,” it added.
Among its top picks, CIMB Research highlighted 99 Speedmart Retail Holdings Bhd, with a target price of RM2.60; MR DIY Group (M) Bhd at RM2.15; and MyNews Holdings Bhd at 55 sen, as direct beneficiaries under Sara-linked consumption.
On the food and beverage front, Nestle (M) Bhd, with a target price of RM86.20; Fraser & Neave Holdings Bhd at RM29.70; QL Resources Bhd at RM4.85; and Farm Fresh Bhd at RM2.25 should gain from higher demand for staples.
Broader retail plays such as Padini Holdings, with a target price of RM2.55; Aeon Co (M) Bhd at RM1.75; Yoong Onn Corp Bhd at RM2.50; and Bonia Corp Bhd at RM1.29, may benefit indirectly, while Berjaya Food Bhd, with a target price of 28 sen and 7-Eleven Malaysia Holdings Bhd at RM1.63 are expected to see muted upside.
For the leisure segment, CIMB Research said the slight reduction in subsidised RON95 petrol prices to RM1.99 per litre may somewhat encourage more visitors to drive up to Resorts World Genting, albeit not in a significant way.”
It maintained “hold” on Genting Malaysia Bhd, with a target price of RM2.15.
Meanwhile, Petronas Dagangan Bhd (PetDag) is not seen as a major beneficiary.
“We reiterate our view that the recently announced reduction in RON95 pump prices, while directionally positive, is unlikely to significantly impact PetDag’s retail sales volumes, given the relatively inelastic nature of fuel demand in Malaysia,” CIMB Research explained.
It said any marginal gains would be offset by the exclusion of non-citizens, with MyKad-linked verification and the Setel platform ensuring smooth execution of the scheme.
Prime Minister Datuk Seri Anwar Ibrahim unveiled Budi95 earlier this month, confirming that all licensed Malaysian drivers aged 16 and above will be eligible for 300 litres of subsidised RON95 monthly at RM1.99 per litre. Non-citizens will continue to pay the market rate of about RM2.60 per litre.
Finance Minister II Datuk Seri Amir Hamzah Azizan said the rationalisation should save between RM2.5bil and RM4bil annually, with redirected funds supporting cash aid and infrastructure upgrades.
Early access begins on Sept 27 for security forces, followed by STR recipients on Sept 28 with nationwide rollout slated for Sept 30.
