The government will prioritize retargeting the RON95 petrol subsidy this year before implementing the carbon tax in 2026, according to Finance Minister II, Datuk Seri Amir Hamzah Azizan.
He explained that it is inappropriate for the government to continue to subsidize fuels such as petrol and diesel, while planning to implement a carbon tax on the energy sector.
Speaking at the ‘Delivering Malaysia’s Energy Transition’ forum session on Tuesday, Amir Hamzah stressed that it is unreasonable for the government to impose taxes on one hand and continue to channel subsidies to the fuel sector at the same time.
Therefore, the rationalization of subsidies needs to be implemented first as the basis for a sustainable policy framework and mechanism, including the implementation of a more comprehensive carbon tax.
The planned carbon tax involving the iron, steel and energy sectors as announced in the 2025 Budget is scheduled to begin in 2026.
Meanwhile, Prime Minister Datuk Seri Anwar Ibrahim yesterday assured that any adjustment in the price of RON95 will not affect 85% to 90% of Malaysians, as the targeting approach will ensure that only the wealthy are affected.
The government stressed that the rationalisation of subsidies is an important step to ensure that national resources are distributed more efficiently, especially to the low-income group.
However, even though petrol subsidies will be reviewed this year, the carbon tax is still ‘loyally waiting’ for next year – it cannot be run away!
One adjustment after another is coming, and it seems that people’s wallets must prepare for the increasingly ‘sustainable’ transition.
