MIDF Amanah Anticipates RON95 Fuel Subsidy Rationalisation To Be Pushed To 4Q 2025
KUALA LUMPUR, May 29 (Bernama) -- MIDF Amanah Investment Bank Bhd anticipates the implementation of RON95 fuel subsidy rationalisation may be pushed to the fourth quarter of 2025 due to unresolved issues such as eligibility and the delivery mechanism.
The investment bank said the potential delay in RON95 fuel subsidy rationalisation to the second half of 2025 (2H2025) is expected to offer temporary relief to consumers, supporting private consumption amid stable inflation.
Recently, Finance Minister II Datuk Seri Amir Hamzah Azizan said the rationalisation of RON95 fuel subsidies will be implemented in the 2H2025.
He added that the Finance Ministry will continue with the subsidy rationalisation process, but the current focus is on identifying the groups that will be eligible to receive the subsidy.
MIDF Amanah Investment Bank Bhd said the potential delay in RON95 fuel subsidy rationalisation to the second half of 2025 (2H2025) is expected to offer temporary relief to consumers, supporting private consumption amid stable inflation.
“While the Finance Ministry targets a 2H2025 rollout, we anticipate implementation may be pushed to the fourth quarter of 2025 due to unresolved issues like eligibility and the delivery mechanism,” it said in a note today.
The investment bank also said that consumers are unlikely to face any significant price pressure via pass-through mechanisms.
However, MIDF Amanah said inflationary pressures could emerge later in the year, driven by the potential pickup in price pressure stemming from subsidy reforms and the higher utility costs for businesses.
The investment bank also said that the gap between the Producer Price Index (PPI), which measures the price changes at the producer level, and the consumer price index (CPI) continues to widen further, with the CPI continuing to grow modestly by 1.4 per cent year-on-year in April 2025.
On Wednesday, the Statistics Department Malaysia said April 2025’s PPI contracted by 3.4 per cent y-o-y. It was the second month of decline and the sharpest drop since June 2023.
The weaker price pressure was mainly attributable to the steeper double-digit price decline in the mining sector, mainly due to a sharper drop in crude petroleum prices while natural gas prices saw a more moderate decline.
-- BERNAMA