KUALA LUMPUR, Oct 21 — Treasury Secretary-General Datuk Johan Mahmood Merican said today the government could implement a tiered system when it redistributes subsidies for RON95 petrol by middle of next year

He also reiterated the Anwar administration’s pledge to retain assistance for 85 per cent of Malaysians.

"In a sense yes, electricity subsidies were done on a tiered (system) whereby those with higher consumption have to pay higher and those who consume less will pay less,” Johan told a post-Budget 2025 forum.

"So, in theory, in terms of achieving what the prime minister’s announced where the overwhelming majority still benefits from subsidies, a form of tiered subsidies is being considered,” he added.

Malaysia has subsidised petrol prices for decades through a system first introduced in the early 1980s to help keep fuel prices affordable for Malaysians and support economic growth.

Over the years, it has become a significant part of government expenditure, especially as global oil prices climbed. In 2023, the country spent over RM50 billion on direct fuel subsidies alone.

The political risk that comes with rolling back petrol subsidies was seen as a key reason previous administrations have avoided it.

Another factor was the complexity of a targeted subsidy system, which remains a headache for policymakers in the Anwar government.

Johan said today his ministry is currently looking at several options.

"So for individuals the mechanism could be a fleet card, or using the IC which links back to (our) database, or could be the combination of e-wallet or specific forms of debit card, these are basically the options that we are looking at so we could replicate the tiered pricing we did with diesel,” he said.