Kuala lumpur: The RON95 petrol rationalisation plan, which sets the price of the fuel to RM1.99 from RM2.05 per litre starting September 30, 2025, is expected to contain inflationary pressures in the country and provide a boost to growth, said OCBC Global Markets Research.

According to BERNAMA News Agency, the price cut of RON95 petrol will reduce annual inflation by 0.1 percentage points, while headline inflation averaged 1.3 percent year-on-year from January to July 2025. “Looking ahead, the water subsidy rationalisation will likely push up August and September inflation, but this will likely be offset by the 3.0 percent cut to RON95, effective September 30, 2025. From a monetary policy perspective, we expect Bank Negara Malaysia (BNM) to keep its policy rate unchanged at its November 6 meeting,” it said in a research note.

Meanwhile, CIMB Treasury and Markets Research expects the Department of Statistics Malaysia (DOSM) to adopt a volume-weighted approach in incorporating RON95’s tiered pricing, which would imply a slight deflationary effect on the Consumer Price Index (CPI). It stated that the measure is viewed as broadly inflation-neutral, with Malaysians benefiting from the price cut, consistent with BNM’s guidance that domestic reforms will have a limited inflationary impact. “We forecast headline inflation at 1.5 percent in 2025 and 2.0 percent in 2026, underscoring price stability and keeping real rates in positive territory,” it added.

The Finance Ministry (MOF) has announced that Malaysians are eligible for a monthly subsidised ceiling of up to 300 litres of RON95 petrol under the BUDI MADANI RON95 (BUDI95) targeted subsidy programme. It also mentioned that e-hailing drivers are exempt from the ceiling and may apply for additional allocations to ensure their livelihoods are not affected.