Malaysian Prime Minister Anwar Ibrahim has announced a major revision to fuel prices, with the cost of RON95 petrol set to drop to RM1.99 per litre — equivalent to approximately S$0.60. This move, part of a broader targeted subsidy initiative, marks a slight yet symbolic decrease from the previous price of RM2.05 (S$0.62).
The fuel subsidy update was shared during a public briefing on Jul. 23, alongside another major announcement: a one-off RM100 (about S$30) digital credit to be disbursed to all Malaysian citizens aged 18 and above.
Further clarification on the implementation timeline and mechanics of the new RON95 pricing scheme is expected by the end of September 2025, according to Anwar.
Petrol Price Nearly 5 Times Higher in Singapore
For Singaporeans, the contrast is stark. As of July 2025, the average pump price for petrol in Singapore stands at S$2.88 per litre, nearly five times the subsidised Malaysian rate. While Malaysia continues to heavily subsidise fuel for its citizens, Singapore maintains a market-driven pricing model, factoring in taxes, carbon pricing, and limited land availability for refining and storage.
With the Singaporean government focused on sustainability and vehicle electrification, motorists here often cite petrol prices and cost of living as key concerns — especially when neighbouring countries offer far cheaper alternatives just across the Causeway.
Subsidised Petrol Reserved for Malaysians Only
In a clear stance on fuel policy, Anwar reaffirmed that the new lower price would be exclusive to Malaysian citizens. Foreigners and foreign-registered vehicles will be required to pay the full market rate without subsidies.
“This policy is meant to benefit around 18 million motorists nationwide — from young riders as young as 16 to gig economy workers,” Anwar stated, as reported by The Star.
Malaysia has enforced a ban on the sale of RON95 petrol to foreign vehicles since August 2010 to prevent abuse of the subsidy system. The latest move aligns with longstanding efforts to safeguard national resources and ensure public funds benefit only eligible recipients.
Fuel Subsidies Costing Billions in Government Spending
Anwar revealed that subsidies for RON95 petrol have cost the federal government approximately RM20 billion (S$6 billion) each year over 2023 and 2024. Despite a global dip in oil prices, the current market rate for RON95 remains at RM2.50 per litre (around S$0.76) — well above the newly announced subsidised rate.
This new subsidy plan forms part of the government’s broader strategy to rationalise public spending, curb misuse, and streamline assistance to the B40 and M40 income groups.
Previously, a two-tier pricing mechanism was proposed under Budget 2025, aimed at gradually phasing out fuel subsidies for the top 15 per cent of income earners. It remains to be seen whether that approach will proceed alongside the new fuel policy.
Balancing Economic Support and Fiscal Responsibility
The Malaysian government has repeatedly highlighted the need to cut down on leakages within its subsidy programmes, particularly for petrol and diesel. Anwar’s latest move signals a commitment to redirect public funds more effectively, without completely removing support from everyday citizens.
With the announcement receiving a generally positive response from domestic motorists, observers will now be watching closely to see how the government executes the targeted fuel subsidy without disrupting inflation or causing a public backlash.
As Malaysia walks the tightrope between welfare and fiscal discipline, this RON95 price drop may set the tone for more refined economic policies ahead of the next general election.