Gov’t should delay RON95 subsidy rationalisation until dealer margin, MDR issues resolved, says PDAM

The Petrol Dealers Association of Malaysia (PDAM) has urged the government to delay introducing the RON 95 petrol subsidy rationalisation plan until critical industry issues are resolved, reports FMT.

PDAM president Khairul Annuar Abdul Aziz said dealer margins, which are fixed under the automatic pricing mechanism (APM), had not been revised since 2019 and no longer reflected current operating costs. Additionally, he voiced concern over the merchant discount rate (MDR) imposed on card payments, which increases as fuel prices rise but leaves dealers’ per-litre commissions untouched.

“Without a margin revision, small and medium-volume station operators will face losses from the very first day of the RON 95 subsidy rationalisation implementation. And as pump prices increase under the rationalisation, the MDR rises accordingly, but dealer commissions remain static, resulting in a further erosion of margins,” he said in a statement. PDAM represents over 4,000 petrol stations nationwide and had previously voiced similar concerns last year (Facebook post attached below).

The RON 95 petrol subsidy rationalisation plan is set to be implemented in the second half of 2025, as revealed by second finance minister Datuk Seri Amir Hamzah Azizan a few days ago. A few days before that, former economic minister Rafizi Ramli said the plan had been fully handed over to the finance ministry.

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Learn more: RON95 Fuel Subsidy