KUALA LUMPUR, May 29 — 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.
MIDF Amanah noted that consumers are unlikely to face any significant price pressure via pass-through mechanisms.
However, 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.
It added 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.
Yesterday, 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
