In a series of posts on X today, Apurva Sanghi said it would test the government’s ability to ensure adequate cash transfers for the poor, secure the middle class’s participation in its policies, and emphasise climate benefits.

He also said that RON95 reforms, which stand to “reshape the social contract”, cannot only be about fiscal concerns.

“The poor should benefit – assuming off-setting mechanisms like increased cash transfers are in place, which is super important.

“The rich should manage without subsidies, despite (their) complaints,” he added.

He also said that those in the middle class, who use more fuel than the poor and will not receive cash transfers, would be hurt the most.

“Using some subsidy savings or other complementary reforms to help them will secure their buy-in and ensure overall success,” he said.

Apurva also said timing would be important in implementing targeted subsidies for RON95, as they could lead to a one-time increase of between 5% and 9% in price levels, depending on global energy prices.

“Introduce RON95 reforms when energy prices are relatively low,” he said.

On Tuesday, Prime Minister Anwar Ibrahim announced that the Cabinet had agreed to implement a targeted diesel subsidy for consumers in Peninsular Malaysia, estimating annual savings of RM4 billion.

To curb a drastic increase in the prices of goods and services in the peninsula, the government will provide subsidies for traders using commercial diesel vehicles.