THE government will reduce the monthly subsidised petrol quota under the BUDI95 scheme from 300 litres to 200 litres beginning April 2026, as it moves to manage rising subsidy costs driven by escalating global oil prices and ongoing conflict in West Asia.
The Ministry of Finance (MOF), in a statement today, said the adjustment is a targeted and temporary measure aimed at safeguarding national fuel supply without affecting the majority of users, while maintaining subsidised prices for eligible groups.
“As announced today by the Prime Minister and Minister of Finance, Anwar Ibrahim, the MADANI Government has taken early and targeted steps to ensure the country’s fuel supply remains secure for the well-being of the people amid global supply uncertainty arising from the conflict in West Asia.
“This proactive measure is implemented in a planned manner to manage current supply pressures without affecting the majority of users, while ensuring fuel supply remains sufficient for a longer period,” the ministry said.
Despite supply levels remaining stable for now, the government stressed that it cannot adopt a “wait-and-see” approach in strengthening supply security and managing demand prudently.
The ministry noted that prolonged conflict in West Asia has placed pressure on global energy markets, with crude oil prices now exceeding US$100 per barrel, sharply increasing Malaysia’s subsidy burden.
Subsidies for RON95 petrol and diesel in January 2026 alone amounted to approximately RM700 million.
“With the MADANI Government’s decision to maintain the BUDI95 price at RM1.99 per litre for the rakyat and diesel at RM2.15 per litre for targeted groups, the subsidy burden continues to rise.
Based on market prices two weeks ago, when Brent crude was around US$90 per barrel, monthly petrol and diesel subsidies were estimated at RM3 billion.
Now, with crude prices reaching US$100 per barrel, the subsidy burden is estimated to rise to RM4 billion per month,” the statement said.
Under the revised policy, the BUDI95 monthly eligibility cap will be reduced to 200 litres, a move the government described as temporary until global supply conditions stabilise.
Officials said the decision takes into account consumption patterns, noting that nearly 90 per cent of eligible users consume less than 200 litres per month, with an average of around 100 litres, meaning most will not be affected.
The additional quota for e-hailing operators will remain unchanged at 800 litres per month.
At the same time, enforcement efforts will be intensified to curb abuse and leakage of subsidised fuel. The ministry warned that it “will not hesitate to suspend BUDI95 eligibility in cases of misuse or abuse of subsidised RON95.”
The government said it would continue to closely monitor global developments and stand ready to introduce further measures to ensure national energy supply remains stable and sufficient. - March 26, 2026
