Read more: What is happening to RON95 petrol prices in Malaysia?

Hello fellow Malaysians! Have you refuelled recently?

Let's talk about something that hits us all where it hurts - the price of petrol, especially RON95.

You've probably heard whispers of possible price changes, and there's definitely some truth to that.

So, tune in as we unpack the latest information on RON95 petrol subsidies and what it means for your wallet.

Rescue Needed: Uncle Sam Needs A Hand

Remember that 2024 budget is tight?

The government aims to reduce spending, especially subsidies and social assistance, by RM11.5 billion.

It's a lot of fun!

They have already made progress and saved RM7.4 billion so far.

But the gap has yet to be filled and RON95 petrol subsidies sit right on the target list.

Maybank IB Help: The Numbers Find a Solution

The Maybank IB financial wizards turned on their thought laws and ran the simulations.

Here's the gist: To achieve the RM4.1 billion they need to save on 95 RON petrol, there are two options:

1. Raise the price by 32 cents per liter from 1 July 2024 . This is a 15.6% jump, which isn't exactly pocket change. But hey, it gets the job done!

2. Wait until October 1, 2024, but then the price increase must be steeper - a whopping 65 cents per liter (or 31.7%). Ouch! This makes a significant difference depending on how often you fill up.

When there is a political question mark

Wait.

Before you start dreading filling the tank with gold bars, there is an important detail.

Maybank IB itself says that the "when" of this price change will ultimately be a board decision.

It's a political call and they have the final say on both the amount and the timing.

It is even possible that they could delay the whole thing.

Petronas to the rescue? A possible silver lining

Here's a bit of sunshine:

Maybank IB suggests that the government may be able to offset excessive dividends from our national oil and gas giant Petronas.

Imagine Petronas as your super rich uncle who steps in to save the day!?

It's all part of a bigger plan called "budget stabilization."

Basically, the government wants to reduce their deficit (how much they spend compared to their income) and their debt.

Think of it as your household budget—things have to balance, right?

The Finance and Taxation Act (FRA) of 2023 sets some specific goals for this.

Their goal is to reduce the national debt to no more than 60% of our Gross Domestic Product (GDP), which is basically the total value of everything produced in Malaysia.

Also, within the next 3-5 years (2026 at the earliest, 2028 at the latest), the deficit will be below 3 percent.

The Domino Effect: How It Can Benefit You (and the Ringgit!)

Maybank IB believes that the way we manage our economy can have a positive impact on the Malaysian ringgit.

Remember how it's been a little shaky lately?

Well, a strong financial position can help stabilize things.

In turn, this can benefit us all, from everyday people like you and me to companies and investors.

The way forward: more than just petrol

The government deals with the stabilization of public finances in many ways.

This year we have already seen some changes, such as the revision of taxes and the introduction of so-called e-invoices to improve tax efficiency.

They also plan to introduce a new Public Procurement Act (GPA), which will further tighten the public spending belt.

What does this mean for you?

Let's face it, a possible 95 RON price increase is not the best news.

But understanding the bigger picture can help.

The government is trying to walk a tightrope - balancing the need to save money and keeping things affordable for Malaysians.

You can do the following.

Stay informed: Watch out for official announcements about 95 RON price changes.

Plan your fuel consumption: Consider using public transport, use public transport when possible or choose fuel-efficient vehicles.

Feeling the Pinch at the Pump? Understanding the Possible RON95 Price Increase in Malaysia

Worried about filling up your tank soon? We break down the latest on RON95 petrol subsidy adjustments and what it means for your wallet. Is a price increase coming? We explore the possibilities and the bigger picture of Malaysia's fiscal health. Learn