Government has no intentions on offering RON 95 Petrol Subsidy to Non-Citizen Owned Vehicles.

The government has confirmed its stance on limiting the RON 95 petrol subsidy to citizens only, excluding vehicles owned by non-citizens. This decision aligns with the nation's fiscal strategy under the 12th Malaysia Plan (12MP), known locally as Rancangan Malaysia Ke-12 (RMKe-12).

In a written response on the Parliament website, the Ministry of Economy emphasized the importance of targeted subsidies in reducing national expenditure. “The implementation of the RON95 subsidy in 2025 is expected to provide savings of RM3.6 billion to government expenditure, or a reduction of 21.9% to the total subsidy expenditure, if the subsidies are only given to the B85 group and citizens,”.

By excluding non-citizens from the subsidy, an additional RM0.3 billion (2% of total subsidy expenditure) can be saved. This clarification was made in response to a query about whether vehicles from neighboring Brunei Darussalam would be eligible for RON 95 subsidies.

The targeted RON 95 subsidy is set to roll out in mid-2025 and will cover approximately 85% of Malaysian citizens. Unlike previous systems, which categorized beneficiaries as B40, M40, or T20 based on gross household income, the new system adopts a tailored approach using the Basic Expenses for Decent Living (PAKW) indicator.

The PAKW, introduced by the Department of Statistics Malaysia (DOSM) in November 2024, considers the diverse cost-of-living needs of Malaysian households. It factors in three essential components:

1. Essentials – Basic needs such as food and shelter.
2. Desires – Non-essential items, including leisure activities.
3. Social Participation – Costs related to communal and cultural engagement.

This system aims to create a fairer method of determining subsidy eligibility, ensuring that households receive support tailored to their actual cost of living rather than a one-size-fits-all income bracket.

For better transparency, the MyPAKW calculator has been introduced, allowing households and individuals to estimate their basic living expenses and understand their eligibility for government subsidies.

While non-citizens and foreign-owned vehicles will no longer benefit from the RON 95 subsidy, the savings generated are expected to strengthen the country's financial position and prioritize support for Malaysians in need.

Want to sell or buy a used car? Download the Motorist Malaysia App today.

Read More: RON95 petrol subsidy: addressing inequities for low-income households in Malaysia

Download the Motorist App now. Designed by drivers for drivers, this all-in-one app lets you receive the latest traffic updates, gives you access to live traffic cameras, and helps you manage vehicle related matters.