Image credit: NST
ALOR STAR: Kedah business and consumer groups have lauded Prime Minister Datuk Seri Anwar Ibrahim's announcement to maintain the RON95 petrol price, calling it a responsible move.
The Malay Chamber of Commerce Malaysia (DPMM) Kedah chapter said the Prime Minister's assurance offers relief to the business community and small and medium enterprises (SMEs) operating under mounting cost-of-living pressures.
"The statement is seen as a responsible measure, particularly for businesses and SMEs navigating a fragile economic environment.
"However, it must be followed by broader and more transparent economic reforms, not merely short-term subsidies without a long-term direction," it said in a statement today.
DPMM Kedah warned that any abrupt removal of the RON95 subsidy could trigger a fresh wave of inflation, jeopardising the price stability of essential goods and mounting pressure on micro and small businesses.
Citing an SME Bank study, the group said a 10-sen increase in RON95 prices could raise the Consumer Price Index (CPI) by 0.27 percentage points.
"If the subsidy were removed entirely, inflation could surge by as much as 3.1 percentage points.
"This highlights the sensitivity of the Malaysian economy to changes in fuel prices," it said, adding that any shift to a targeted model must be gradual and data-driven.
"Without a comprehensive database, genuine recipients risk being excluded, further widening inequality," DPMM Kedah said.
It said fuel subsidies, including for liquefied natural gas (LNG), are placing long-term pressure on the national budget, with Malaysia spending RM81 billion in 2023, much of it on RON95.
The group urged the government to expand dialogue with industry players in designing a subsidy rationalisation plan to avoid sudden shocks to the domestic business ecosystem.
Meanwhile, Consumer Association of Kedah (Cake) president Yusrizal Yusoff welcomed the prime minister's commitment not to raise RON95 prices, while addressing the misuse of subsidies by foreigners and the wealthy.
"Consumers are relieved by the assurance.
"Many Malaysians are already burdened by high living costs.
"A fuel price hike would only worsen the situation," he said.
Yusrizal said most Malaysians rely on RON95 for personal and business transport, including logistics.
He called for strict enforcement to prevent foreigners and luxury vehicle owners from using RON95, which is meant for ordinary Malaysians.
"We already have a system where luxury cars and foreigners must use unsubsidised RON97.
"This policy just needs to be enforced effectively."
However, he cautioned against mechanisms that would complicate or slow down fuel purchases for locals, such as mandatory identity checks.
"If users are required to scan their identification cards, this could delay transactions at petrol stations. Many outlets already provide convenient options like debit card pumps.
"A cumbersome system may only frustrate users," he said.
Yusrizal urged the government to adopt a practical and efficient approach to managing RON95 purchases to protect subsidies without inconveniencing the public.
Yesterday, Anwar reiterated that the government would not raise the price of RON95 petrol for Malaysians.
Source: https://www.nst.com.my/news/nation/2025/05/1221178/ron95-price-cap-relief-smes-say-kedah-business-and-consumer-groups