PETALING JAYA: A tiered subsidy mechanism for RON95 petrol has been proposed by an economist to encourage conservation and eliminate fuel theft.
Geoffrey Williams suggested implementing full subsidies for the first 100 litres with gradually reducing support for higher consumption levels.
“This will encourage people to save, cut theft and cross-border resale, prevent hoarding, while reducing the subsidy bill,” he said.
The proposal comes as the government prepares to reduce the subsidised RON95 quota under the Budi95 programme from 300 litres to 200 litres, effective April 1.
Economists argue that the shift will have a minimal impact on the general public, as approximately 90% of Malaysian drivers consume less than 200 litres of petrol per month.
Prime Minister Datuk Seri Anwar Ibrahim had announced the quota reduction based on data showing the average motorist uses only about 100 litres monthly.
Because the vast majority of consumers fall well below the new 200-litre ceiling, Williams noted that the policy primarily targets high-volume users, typically from higher-income groups with fuel-intensive vehicles.
He said larger logistics operators remain protected through existing diesel subsidies, quota systems and fleet cards, ensuring that the shift does not translate into higher transport costs.
Despite the quota change, Williams cautioned businesses against using the policy shift as a pretext for price hikes, noting that fuel prices remain unchanged.
He emphasised that the government must increase enforcement to stop profiteering.
Economist Dr Ida Md Yasin agreed that the revised quota is unlikely to move the needle on inflation for most households or small businesses.
“Malaysia is better off compared to neighbours like the Philippines or Thailand, where oil supply itself is limited,” she said.
