RON95 petrol price might go up to RM2.45/litre this year

Following the diesel fuel rationalisation programme that started last month, we can most likely expect the same thing for RON95 petrol this year, but in stages.

When it comes to the rationalisation of the RON95 subsidy, it might be implemented gradually to reduce 'shock'. Sitting pretty at RM2.05/litre at the moment, the complete subsidy removal would increase its retail price to RM3.30/litre and the Malaysian government doesn't want to take everyone by surprise, Harian Metro reported.

Before the RON95 subsidy rationalisation can even begin, the government will need time to assess two key factors related to the matter - PADU's database system readiness and the impacts in relation to the diesel price adjustments.

With enough time for data collection and assessment, a proper strategy can be implemented which is vital considering the fact that the impact will affect over 36 million vehicles on the road here in Malaysia, or over RM66 billion in automotive fuel retail sales as recorded back in 2023.

What we can expect is a slight adjustment in the RON95 subsidy, which might see an RM0.40 increase to RM2.45/litre sometime in the last quarter of 2024. More details on the country's fuel subsidy programme will be presented in the upcoming Budget 2025, which has been scheduled to take place in October this year.

It is said that for every RM0.10 increase in fuel prices, the government can save around RM2 billion from the subsidy budget (assuming that 20 billion litres of fuel were purchased that year). RM0.40? Do the maths.

It's all assumptions and predictions for now, but we will know more in the coming months. If the RM0.40 increase does happen, 30 litres of RON95 will cost you RM73.50 instead of RM61.50 right now.

Time to move over to EVs?