THE Madani Government’s targeted fuel subsidy scheme under the Budi Madani RON95 (BUDI95) programme will commence in phases from 27 September, with the federal government aiming to deliver a more structured approach to fuel assistance and reduce leakage in subsidy distribution.
The initial phase will grant all Malaysians with a valid MyKad and driving licence access to RON95 petrol at the subsidised rate of RM1.99 per litre
According to the Political Secretary to the Finance Minister Muhammad Kamil Abdul Munim this approach seeks to balance inclusivity with control mechanisms.
“After this first phase, we will assess how well the programme works before introducing improvements.
For example, the T15 (Top 15 per cent income group) may later be excluded from receiving the RON95 subsidy,” he said at a press conference during the launch of the MASCHON health observatory network in Kuala Lumpur.
He added: “We want to ensure that the transition causes minimal inconvenience while reducing technical and operational issues. The goal is to ensure this policy runs smoothly and achieves the government’s aims.”
The BUDI95 rollout begins on 27 September with military and police personnel, followed by Sumbangan Tunai Rahmah (STR) recipients on 28 September, and the general public—an estimated 16 million Malaysians aged 16 and above—on 30 September.
Subsidy cap of 300 litres per month defended
While the cap of 300 litres per month per individual has drawn public scrutiny, Muhammad Kamil defended the decision, saying it was based on average usage data gathered from public engagement sessions.
“Most Malaysians use between 200 and 220 litres of RON95 per month, so setting the limit at 300 litres is a rounded figure to avoid issues,” he explained.
He emphasised the importance of control mechanisms: “Without a limit, what mechanisms do we have to prevent abuse? It could open up opportunities for people to profit from reselling subsidised fuel. This is exactly the kind of leakage we’re trying to stop.”
The Finance Ministry confirmed that non-citizens will pay RM2.60 per litre for RON95 under the new scheme starting from the same date.
Petrol dealers ready, public urged to remain calm
Petrol Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar Abdul Aziz assured the public that service stations nationwide are fully prepared to implement the new pricing mechanism.
“Petrol station operators already have a business continuity plan in place to ensure the subsidy rollout runs smoothly, even if transaction systems encounter disruptions,” he said during an interview on Bernama TV.
“We do not want to burden the public. We want to make sure they can still enjoy the RM1.99 price. With the preparations in place, hopefully everything will run smoothly by 27 September,” he added, urging patience in case of any temporary delays.
Economists back reform as ‘politically courageous’
The BUDI95 programme has received praise from academics, who view it as a crucial step towards subsidy rationalisation amid growing fiscal pressures.
Associate Professor Aimi Zulhazmi Abdul Rashid of UniKL Business School described the initiative as “commendable” and “politically courageous,” given the rising cost of fuel subsidies.
“It is not an easy move, but the Madani Government has taken a bold step as the subsidy amount keeps rising,” he noted.
He argued that successful implementation could unlock substantial savings for the national budget, potentially allowing greater investment in public services such as healthcare.
However, Aimi stressed that the long-term viability of the scheme depends on consistent policy execution:
“There must be continuity. The government must refine its implementation based on input from the public and industry players to ensure a lasting, meaningful impact, he added.
The BUDI95 programme marks a significant pivot in Malaysia’s approach to fuel subsidies — one that prioritises targeted support, fiscal discipline, and long-term sustainability, while ensuring that the rakyat continue to receive direct benefits in a controlled and equitable manner. - September 24, 2025
