A proposed new fuel subsidy initiative in Malaysia would potentially exclude the country's richest from subsidized RON95 fuel at fuel stations. Talks about the T5, T10, T15, and T20 income groups are making waves. The article explains the income group breakdown and the potential implications.
Subscribe to our FREE Newsletter, or Telegram and WhatsApp channels for the latest stories and updates. Talk of “the rich” potentially being excluded from fuel subsidies in the future has been a hot topic in the news lately.
The Malaysian government recently announced that a proposal for the rationalisation of RON95 fuel subsidies under the BUDI95 initiative, specifically for the T20 income group, was being refined. Part of this plan involves a ban on high-income earners in Malaysia from purchasing subsidised RON95 petrol at fuel stations. Which group will be affected remains unknown but naturally, conversations concerning the T5, T10, T15, and T20 groups are making waves. What are the income groups and their income levels?
As many of us already know, Malaysia’s income groups are generally divided into B40, M40, and T20. The B40 group represents households with the lowest income levels, representing the bottom 40% of earners in Malaysia. These households earn up to RM5,859 a month. Those in the M40 group are the middle-income earners, comprising the middle 40% of households.
Households in this group earns between RM5,860 and RM12,679 per month. T20 represents the top 20% of earners and are considered part of the country’s highest income earners. The households in this group makes more than RM11,820 per month. Of course, the classification of these income groups are constantly updated to reflect changes in economic conditions, inflation, and living standards.
Sub-groups of T20 Under the T20 income group, there are more divisions to categorise high-earners in even more detail. According to job search platform JobStreet, T20 is divided into two sub-divisions: T1 and T2.
Other subsets of the T20 group include: Mixed public reaction on blanket subsidy ban for T20 The government’s proposal to implement a blanket exclusion on the T20 group from RON95 fuel subsidies has sparked mixed reactions from the public. At the moment, the government has not officially announced the fuel subsidy rationalisation yet, but many Malaysians are already sharing their thoughts on the proposal.
Some are saying the classifications of the T20 income group are too wide for the exclusion to be fair. Reina Lum, a former lawyer, shared on TikTok how a household who earns RM1 million and a household that earns RM1 billion are lumped in the same income group, and that the gap between a million and a billion is actually really wide.
She also highlighted that if you earn more than RM12,000 a month, you are already considered in the T20 bracket, which means you are placed in the same group as T5, who earn up to RM20,000 a month per household. @reinalum T20 tak layak dapat subsidi? Ini satu debat yang hangat & Reina harap kupasan ni boleh bantu rakyat nilai situasi dgn lebih mendalam. Unfortunately, this made us turn against each other..
Don't let it. Kita jaga kita. #fypmalaysia #subsidi #minyak ♬ original sound – Reina Lum Many argued that T20 households can bear the cost of fuel without the subsidy with no issues, but that is without taking into account other costs of living such as mortgages, vehicle loans, and child expenses.
A report by Free Malaysia Today quoted economist Mohd Afzanizam Abdul Rashid who suggested that the subsidy exclusion should start from the T1 group which, based on data by the Department of Statistics Malaysia , classifies T1 households as earning a median income of more than RM55,000 a month. Some also suggested cutting off the T1 and T5 groups from fuel subsidies, saying that households in those income groups earn the most in the T20 group and will have no problems paying market prices for fuel.
Meanwhile, an X user also recommended fuel subsidy exclusion based on total salary earned instead of going by T20 group tiers. As the nation waits on the government’s finalised proposal on the rationalisation of fuel subsidies on the high-income groups, opinions remain divided online. Share your thoughts with us via TRP’s Facebook, Twitter, Instagram, or Threads.
Malaysia Fuel Subsidy Income Groups High-Earners
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