Automotive RON95 Subsidy

Published on July 23rd, 2022 | by Daniel Sherman Fernandez


Can The RM2 Billion RON95 Subsidy Be Controlled Effectively?

How Will RON95 Subsidy Be Controlled For The B40.

Well, the solution to control targeted RON95 fuel subsidies is not going to be easy as there is no easy way to control the RM2 Billion RON 95 fuel subsidy clearly and efficiently without having leakages like we have seen with diesel fuel subsidy for fishermen.

Why? Well, let’s say there is a T20 luxury car owner who gets his B40 chauffeur to fill up fuel every week using his B40 card. How do you stop or control this?

Then there is a large T20 company owner who has a fleet of cars for his B40 sales team. They can fuel up the T20 bosses’ luxury SUV using their B40 fleet card.

We can also assume that the T20 luxury SUV owner asks his B40 retired civil servant buddy to fill up his luxury SUV whenever they meet for morning coffee once a week.

RON95 Subsidy Removed

It is quite clear that the current government needs to keep the RON95 fuel subsidized as much as possible, or at least until the next general election to ensure the majority of B40 voters allow them to stay in power.

With the current economic situation making its move around the globe, it is clear that Malaysia will feel a recession very soon, like it or not and the B40 voters will be the hardest hit as we have already seen in the past months with the rising prices of food and services in all sectors.

Keeping RON 95 fuel affordable is one of the many priorities like cooking oil, rice, chicken and the price of electricity. So, what will happen after their win in the next general election?

The first subsidy to be slowly removed in stages will be RON95 as the RM2 Billion subsidy bill will be much needed to go for food security and to keep the B40 from going hungry.

However, with the RON 95 subsidy removed, prices of other goods and services (which are not controlled) will definitely start inching upwards (restaurant prices for chicken rice, burgers, delivery charges, imported vegetables and meats and so on).

Our humble immediate solution suggestion is this.

·             Reduce government expenditure by reducing top tier salaries by at least 50 percent.

·             Reduce our bloated civil service by at least 20 percent, to start.

·             Reduce all expensive overseas government trips and the numbers travelling by 50 percent.

·             Reduce the large government fleet of vehicles by at least 30 percent.

·             Remove all middleman agencies, for example like MAAri (an automotive agency that has NO relevance when we already have MITI, MOF and MIDA doing the very same job.

·             Remove SPANCO who is the agency in charge of doing maintenance for new government vehicles when it is clear that new vehicles purchase can easily be serviced and maintained by the authorized service center to save a whole lot of unnecessary SPANCO fees.

·             Remove the approved permit (AP) system completely and let it be a free market system like the Singapore COE (certificate of entitlement) where the highest bid for the month gets the AP (COE) and the bid money goes to the government tax account.

We suggest a start with the above and move along with suggestions from the rakyat most affected, the B40. 

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