The Malaysian Institute of Economic Research (MIER) expects a slight tweak in the subsidy for RON95 petrol, which will affect its retail price in Malaysia. This adjustment is likely to occur in either July or October this year, following an evaluation of the effects of the diesel subsidy rationalization, as reported by Bernama.

MIER's executive director, Anthony Dass, mentioned that the expected adjustment in RON95 price won't be as sharp as the recent 56% hike in diesel retail pricing, which rose by RM1.20 from RM2.15 per litre to RM3.35 per litre on June 10.

Dass emphasized the importance of assessing the effects of diesel subsidy rationalization, suggesting a grace period of three to six months for this evaluation. It's essential to analyze the impact and how people are adapting before the government considers the next adjustment to the RON95 petrol subsidy.



He mentioned that the adjustment in RON95 petrol price is likely to happen "around October," providing the government with extra time to conduct impact assessments.

Dass explained that a 1% rise in diesel prices barely affects the Consumer Price Index (CPI) basket, contributing only 0.2%. Meanwhile, RON95 petrol prices contribute around 5.5% to the CPI basket.

Yesterday, Deputy Finance Minister Datuk Seri Amir Hamzah Azizan mentioned that the government's main focus is on initiating its targeted diesel subsidy program. He highlighted that the government will consider other associated matters, like implementing a targeted subsidy for RON95 petrol, once the diesel subsidy program is effectively rolled out.

Amir Hamzah highlighted that the government's efforts to reform subsidies are geared towards reducing the nation's fiscal deficit, allowing for reinvestment in priority areas. He pointed out that subsidy leakage has occurred due to the smuggling of petroleum products and inappropriate access to subsidies by undeserving sectors.