This move is to cushion the country from the impact of rising crude oil prices, international trade and industry minister Azmin Ali said today.

He said the fuel subsidy mechanism was meant to benefit the lower-income group.

“We talked about the review at a special retreat recently.

“Those with BMWs cannot enjoy the same subsidies as those driving Kancils,” Bernama quoted him as saying during a press conference on the recent trade and investment promotion mission to the United States.

Azmin said the government is still working on a suitable structure following the sharp hike in the fuel subsidy projection for 2022 to RM28 billion, compared with RM11 billion in 2021.

The government previously said it will maintain the ceiling price of RON95 at RM2.05 per litre and diesel at RM2.15 per litre, even though the market price (derived from the automatic pricing mechanism) for both fuel types had increased beyond the current ceiling price.

The premium RON97 fuel, which is not subsidised, is currently retailing at RM4.33.

Last month, Petronas Dagangan Bhd disclosed that it had been working closely with the finance ministry on the increase in the fuel subsidy bill amid near-record high prices for crude oil.

Economic affairs minister Mustapa Mohamed was also reported to have said that the government is still working on a suitable structure for the targeted fuel mechanism and this was expected to be completed soon.