PUTRAJAYA — Targeted subsidies for RON95 petrol will involve a two-tier pricing system, Economy Minister Rafizi Ramli said.
Under this system, only the top 15% income group, who are not eligible for subsidies, will pay the market price at petrol stations, Bernama reported him saying today at the National Statistics Day 2024 Celebration and the Pre-launch of the Statistics Portal here.
Rafizi added that 85% of the population will continue to purchase fuel at subsidised prices when the targeted subsidy plan is implemented by mid-next year.
He said the government is currently reviewing the best mechanism to ensure effective implementation.
“The group that will no longer qualify for subsidies is what we refer to as the T15. We are in the process of defining exactly who falls into this category.
“For the remaining 30 million people, the mechanism is being fine-tuned and discussed for implementation,” he said.
The mid-2025 deadline for implementing targeted subsidies for RON95 was stated by Prime Minister Datuk Seri Anwar Ibrahim, when he tabling Budget 2025 in in Parliament on Friday.
Anwar, who is also the finance minister, assured that the government will safeguard the interests of the majority of the people when implementing the targeted subsidy, while savings from the initiative would be directed towards improving the welfare of the wider population.
On the T15 income group and other income classifications, Rafizi said that the definitions will no longer rely solely on gross household income but will incorporate various factors to ensure greater fairness.
Rafizi said the government’s new approach to income classification will take into account net household income to ensure the people can lead a decent life.
“I can confirm that the new method will not depend solely on gross household income. We are currently working on improvements based on net household income.
“It will also consider several other factors. Once that’s finalised, we can then set the statistical lines (for population groups) such as B40 and T15,” he said.
The T15 classification was mentioned by Anwar in his Budget speech when he touched on reduction of subsidies for those in this category. – October 20, 2024