THE government’s decision to raise the monthly quota for subsidised petrol and diesel could help ease cost-of-living pressures while keeping inflation in check, an economist said.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said restoring the basic BUDI MADANI RON95 (BUDI95) quota to 300 litres a month, alongside an increase in the BUDI Diesel quota to 400 litres, would provide some relief to households and businesses.
He explained the move came as inflation continued to rise, with the rate reaching 1.9% in the second quarter from 1.6% in the first three months of the year.
“With the increase in the subsidised fuel quota, it should help keep the inflation trajectory stable,” he was quoted as saying by RTM.
Mohd Afzanizam said the additional fuel allocation could also help businesses, particularly traders, manage their operating expenses at a time when cost pressures remained a concern.
For households, he added, the move would help cushion some of the impact of higher living costs.
The higher quotas are not expected to significantly undermine the government’s fiscal position if the additional spending is managed carefully, he stressed.
Mohd Afzanizam, however, said the government should be clearer about how the expanded subsidy programmes would be funded.
“I think the announcement is positive, but what could be improved is how the government explains the programmes announced, particularly in terms of their financing.
“Clear information would give the investment community a better picture of the government’s direction and fiscal discipline,” he said, according to RTM.
Prime Minister Datuk Seri Anwar Ibrahim announced yesterday that the basic BUDI95 quota would be restored to 300 litres a month, up from 200 litres previously.
The move is expected to benefit about 16 million users.
Meanwhile, more than 500,000 diesel vehicle owners will be eligible for up to 400 litres of subsidised diesel a month under BUDI Diesel.
The government has said the decision is aimed at easing the burden on Malaysians while ensuring fuel subsidies remain targeted towards those who need them. – August 31, 2026
