THE government has reaffirmed its commitment to maintaining a targeted petrol subsidy through the BUDI MADANI RON95 (BUDI95) programme, rejecting the World Bank’s recommendation to link fuel prices directly to market rates.
Prime Minister Datuk Seri Anwar Ibrahim emphasised that the targeted subsidy remains the most effective way for the government to control expenditure without placing undue burden on the public.
“Their proposal was to raise the price to RM2.65 per litre for all petrol, then provide targeted subsidies to specific categories.
“I and my Cabinet colleagues rejected this suggestion. The proposal was debated extensively, and it was ultimately agreed to reduce the RON95 price for Malaysians while applying market rates to foreigners,” he said while presenting the 2026 Supply Bill in the Dewan Negara today.
As Finance Minister, Anwar explained that the comprehensive subsidy targeting ensures assistance reaches the intended recipients while curbing leakages to non-citizens and commercial users.
“In this approach, combating corruption and targeting subsidies is crucial. We saved RM15 billion through the rationalisation of RON95, electricity, diesel, chicken and egg subsidies, achieving overall savings of more than RM15.5 billion,” he added.
The Prime Minister further stressed that, in presenting Budget 2026, the government opted against introducing new taxes, choosing instead to focus on improving governance, refining subsidy targeting, and strengthening tax compliance. - December 2, 2025
