The reason for this action is that RON95 is highly subsidized by the Malaysian government and because of this, the price of RON95 is only RM1.85 per liter. It was slightly cheaper before 15th July 2010 but has since had a 5sen increase due to increasing petrol costs. All foreign registered cars can however pump as much RON97 as this is now on a controlled float pricing instead of being subsidized.
Basically RON95 is for Malaysians due to the subsidized price and due to this subsidy, a lot of motorists from Thailand and some from Singapore take advantage of the cheap fuel. But the main culprits who take advantage of the cheap fuel are those at the Thai border where there is no restriction on how much petrol a Thai registered car has to have before leaving Thailand. This is unlike Singapore where Singapore registered vehicles must have at least ¾ tank of fuel in their tanks before leaving the Singapore side of the Causeway. On the Thai side, people there even smuggle petrol and diesel in hidden tanks so that they can sell or have more of it to use in Thailand.
One other news that recently made headlines in Malaysia was that Malaysians who drive foreign registered cars can fill up their cars with RON95 provided they show their Malaysian identity card to the cashier. Right at this moment station operators are having problems enforcing this regulation and I suppose it would be some time before everyone is aware of such regulation. Not to mention there will always be people who would want to find some loophole even though RON97 is cheaper than RON95 .
The subsidized price of Malaysian RON95 and RON97 will slowly inch upwards during the next 4 years or so until all petrol (and diesel) subsidy is removed. When this happens expect RON97 to cost about RM2.60 at the very least. On another note, diesel has also inched up 5sen to RM1.75 per liter which is still very cheap in my books.