Two-tier RON95 petrol pricing system based on net income, says Rafizi – T15 to pay RM2.76, rest RM2.05

Last Friday’s tabling of Budget 2025 saw prime minister Datuk Seri Anwar Ibrahim announce the impending end to blanket subsidies for RON 95 petrol, which will be replaced by a targeted version that will come into place from mid-2025.

Anwar, who is also finance minister, said that 85% of the rakyat will continue to enjoy subsidised RON 95, which is currently pegged at RM2.05 per litre. He then introduced a new term – T15, for the top 15% of earners – and described this group as maha kaya. With no more subsidy, the ‘super rich’ and foreigners will pay the market rate for petrol, which is currently RM2.76.

This led to much chatter among netizens about who’s classified in the T15. Since the government mentioned ‘household’, is a working couple earning RM6,500 each (for a total household income of RM13,000) considered maha kaya in Malaysia?

Now, economy minister Rafizi Ramli has come out to clarify that future income classifications will no longer rely solely on gross household income, but 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 told reporters at the National Statistics Day 2024 Celebration yesterday, reported by Bernama.

He reiterated that a two-tier pricing system will be introduced and under this system, only the T15 will pay the market price for RON 95 at petrol stations. 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.

Remember PADU? Launched earlier this year, PADU is a central data repository for individuals and households of citizens and permanent residents of Malaysia, and this will likely be used to draw up a new net income classification, which will determine your pump price.

Another big challenge for the government is the mechanism – how to implement this at the pump level. MyKad perhaps?

Looking to sell your car? Sell it with Carro.