Malaysia

Government channels fuel subsidy savings into public aid through BUDI95

Funds redirected to support cost-of-living measures and welfare programmes for the B40 and M40 income groups, Anwar says

Updated 5 months ago · Published on 11 Feb 2026 10:51AM

Government channels fuel subsidy savings into public aid through BUDI95
Malaysia’s MADANI administration has reported significant savings from targeted petrol subsidies under the BUDI95 initiative - February 11, 2026

THE MADANI government has emphasised that savings generated through the targeted petrol subsidy scheme, BUDI95, are being reinvested to alleviate household costs and strengthen social assistance for low- and middle-income Malaysians.

Responding to a parliamentary question from Fong Kui Lun (Bukit Bintang), Prime Minister Datuk Seri Anwar Ibrahim highlighted that the BUDI95 programme, implemented throughout 2025, has successfully reduced subsidy leakages and ensured support reaches its intended recipients.

“Under the MADANI administration, we chose to acknowledge fiscal realities and boldly phase in subsidy targeting, without undermining the welfare of the majority of citizens.

“After successfully targeting electricity and diesel subsidies, the RON95 petrol subsidy has now been implemented,” Anwar stated.

Anwar, who also serves as Finance Minister, explained in the Dewan Rakyat on Wednesday that the government deliberately did not adopt the World Bank’s recommendation to liberalise fuel prices combined with cash transfers solely to the poorest households, noting that such conventional economic approaches risked increasing inflation and burdening the middle-income population.

Instead, BUDI95 leverages digital technology to deliver subsidies efficiently while preventing leakages to foreign nationals and commercial entities.

The initiative has reduced the price of RON95 for Malaysian consumers to RM1.99 per litre, while non-residents and commercial users pay market rates.

“Throughout the rollout of BUDI95, the priority has been to ensure citizens’ petrol-purchasing experience remains seamless. Payments can still be made via cash, credit card or e-wallet, and subsidised prices are available at all fuel stations,” Anwar said.

Data from BUDI95 shows an average of 3.1 million transactions daily, or 96 million per month, confirming the scheme’s operational efficiency.

The monthly cap of 300 litres per vehicle aligns with typical usage patterns, with 90 per cent of users consuming less than 200 litres.

Looking ahead to 2026, the targeted subsidy is projected to save at least RM2.5 billion, depending on global crude oil prices and currency fluctuations.

 The government credits the initiative for curbing subsidy leakages and deterring cross-border smuggling.

“I also commend citizens who report attempts by foreigners to exploit subsidised RON95. This vigilance reflects both patriotism and civic responsibility,” the prime minster added.

Fiscal savings have been redirected to citizens, notably through the Sumbangan Asas Rahmah (SARA) programme.

Launched on 9 February, all 22 million Malaysians aged 18 and above received RM100 each via their MyKad.

The SARA initiative also stimulates local economic activity, benefiting retailers and small and medium enterprises supplying essential goods.

Within just two days, nearly RM200 million was spent by two million Malaysians.

The Finance Minister reiterated that MADANI’s approach links reform to inclusive growth, ensuring that surplus fiscal resources from subsidy rationalisation are returned directly to citizens.

“Reforms do not compromise the rights and welfare of the people; they are designed to protect and empower them,” he added. - February 11, 2026

Spotlight

Malaysia

After Johor, the uncomfortable question for Anwar’s critics: Were we too impatient?

By The Vibes Says

Malaysia

Network School's business licences revoked, to cease operations tomorrow

Opinion

Orang Asli in Pahang: Token gestures or genuine recognition?

Malaysia

Tuition teacher sentenced to 105 years in prison and 70 lashes for raping daughter

Malaysia

Azam Baki denies involvement in RM178.29 million contract linked to brother’s company

Malaysia

Aminuddin urges NS voters to weigh manifesto promising benefits for M40 and B40 groups

Malaysia

No need to resign, PM has absolute power if there is doubt – Ahmad Zahid

World

Gaza’s water crisis deepens as families face thirst, disease and collapsing sanitation systems

You may be interested

Malaysia

PRN Negeri Sembilan: BN + PN = PBN, says Hamzah

Malaysia

Armed robber fails to steal RM82,000 from security van after guard’s quick action

Malaysia

PM hails Federal-Sarawak partnership in Sarawak Day message

Malaysia

Sabah does not agree to 200-litre diesel quota, forms special committee - Masidi

Malaysia

Six female students charged with rioting after viral school incident in Sabah

Malaysia

Activist charged over alleged desecration of Hindu sacred object at Langkawi temple site

Malaysia

PRNNS: No place for race-based, hatred campaigns in Negeri – Aminuddin

Malaysia

KL police stress round-the-clock readiness to safeguard city