Second Finance Minister Datuk Seri Amir Hamzah said the diesel subsidy rationalization measures are expected to save the government RM7.2 billion to RM7.5 billion annually, higher than last year's estimate of RM4 billion.
He pointed out that due to the effective implementation of the diesel subsidy rationalization, savings of up to RM600 million can be achieved monthly.
“When we launched (diesel subsidy rationalization) in July 2024, we estimated annual savings of about RM4 billion. Currently, we are recording about RM600 million monthly, so yearly savings should be about RM7.2 billion to RM7.5 billion.”
“We are doing better than expected because the (diesel subsidy) leakages are much more than we imagined, and it is currently limited to Peninsular Malaysia.”
He pointed out at a panel discussion at the 2025 Malaysia Economic Forum (FEM) today (9th) that the fundamental issue to be considered when implementing diesel subsidy rationalization is the key matters that the government must manage.
Amir pointed out that the leakages are mainly divided into retail to commercial fields, and a large amount involves cross-border personnel leakages. Only when a system is established that actually reduces the risk of leakages can better results be achieved, as it can reduce cross-border leakages.
In addition, Amir emphasized that the Ministry of Finance and the Ministry of Economy are studying the RON95 gasoline subsidy rationalization mechanism to be implemented this year, researching the implementation of a "two-tier pricing" mechanism to protect 85% of the population from being affected.