KUALA LUMPUR: The government will focus on rationalising RON95 petrol subsidies this year before introducing a carbon tax in 2026, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
He said existing energy subsidies have distorted the system, making it illogical to tax carbon while continuing to subsidise fossil fuels.
“It doesn’t make sense to impose taxes on one side while still subsidising petrol and diesel on the other,” he told a panel session titled Delivering Malaysia’s Energy Transition. He stressed that subsidy rationalisation is a necessary first step before rolling out a carbon tax, targeted at sectors such as iron, steel and energy, as announced in Budget 2025.
Amir said the government must avoid “unintended consequences” by ensuring the broader system is ready, with supporting frameworks and robust measurement tools in place.
“The transition cannot rely on isolated announcements. Everything must be tied together coherently.”
Deputy Energy Transition Minister Akmal Nasrullah Mohd Nasir also joined the session, chaired by Tan Sri Abdul Wahid Omar of IOI Corporation.
Earlier, Prime Minister Datuk Seri Anwar Ibrahim said RON95 subsidy adjustments would not impact 85 per cent to 90 per cent of the population, and that the policy is designed to better target aid for lower-income groups. – BERNAMA
