RON95 fuel in Malaysia is partly subsidized by the government to maintain low prices for lower-income groups and is only for sale to Malaysia-registered vehicles.
But despite the ban on sales to foreign-registered cars since 2010, many visitors from neighboring Singapore have still found ways to illegally access the cheap petrol, which is reserved for locals at discounts of up to 70%, according to the South China Morning Post.
Frustrated by the growing number of foreigners exploiting the subsidy without consequences, since no penalties are levied against them, petrol dealers are now calling for legislation to hold them accountable.
Gordon Lim, communications and media secretary of the Petrol Dealers Association of Malaysia (PDAM), last Friday called for the purchase of subsidized RON95 fuel by foreign vehicles to be banned and offenders to be penalized.
This suggestion was also supported by consumer groups. Herby Dhillon, secretary-general of the Malaysia Consumers Movement, said such a move would send a clear message to offenders that the government is committed to tackling the problem.
Foreign-registered vehicles, particularly those from Singapore, purchasing subsidized fuel has been a persistent issue in Malaysia.
Malaysian Prime Minister Datuk Seri Anwar Ibrahim said last year that foreigners and the ultra-wealthy were benefiting from 40% of the government’s RON95 petrol subsidy, as reported by the New Straits Times.
The issue recently came to the spotlight after a video went viral on social media, showing a woman being stopped by a station attendant in the Malaysian state of Johor just as she began filling up a Singapore-registered car with subsidized RON95 fuel on Jan. 21. The footage prompted an investigation by the Domestic Trade and Cost of Living Ministry.
Lilis Saslinda Pornomo, director of the ministry’s Johor division, later explained on Jan. 25 that the woman had chosen a pump at the far end of the station, away from the cashier, and paid using a debit card. However, a station worker noticed the type of fuel being dispensed and quickly intervened.
She added that Johor was intensifying enforcement efforts to prevent the sale of subsidized RON95 petrol to foreign vehicles during the Chinese New Year holiday, when thousands of Singapore-registered cars were expected to enter the region, CNA reported.
Specifically, 200 enforcement officers from the division were stationed to carry out regular inspections at gas stations throughout Johor, focusing especially on those near crossings between Malaysia and the city-state.
Under current laws, petrol station operators in Malaysia who sell subsidized fuel to foreign-registered vehicles face fines of up to RM1 million (US$228,425) for a first offense.
For repeat violations, penalties can include fines of up to RM3 million, a prison sentence of up to three years, or both.
Earlier last year, Malaysia’s Minister of Domestic Trade and Cost of Living, Armizan Mohd Ali, announced that first-time offenders could face fines exceeding the RM1 million threshold, putting additional pressure on the industry.
However, there is no law saying that fines will be imposed on errant motorists.
“It is unfair to penalize petrol station dealers. The dealers do not want to sell RON95 to foreigners. The profit margin in such transactions is minimal, so it’s not practical or worthwhile to break the law,” Lim said, as quoted by Malaysian newspaper The Star.
He explained that it is challenging to monitor foreign vehicles using pumps at the far end of stations and paying with credit cards to quickly fill up.
Identifying vehicles with foreign plates is also no easy task as Singaporean plates closely resembled those from Sabah, another Malaysian state, he added.
“As long as the buyers are not penalised, they will always keep trying,” he said.
