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
