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THE BUDI MADANI RON95 (BUDI95) fuel subsidy initiative has been lauded by academics as a multi-pronged policy tool that not only alleviates the financial burden on the public but also addresses long-standing issues of subsidy misuse, while supporting Malaysia’s broader environmental and fiscal goals.
Introduced in phases from 27 September, BUDI95 allows eligible Malaysians to purchase RON95 petrol at a subsidised price of RM1.99 per litre — well below the unsubsidised market rate of RM2.60. Up to 300 litres per month is allocated for each individual, benefitting more than five million recipients of the Sumbangan Tunai Rahmah (STR) under the B40 category, as well as 300,000 personnel from the Malaysian Armed Forces and Royal Malaysia Police.
The initiative is open to all Malaysians aged 16 and above with a valid MyKad and driving licence, totalling over 16 million eligible individuals.
Dr Adilah Azhari, a senior lecturer at Universiti Utara Malaysia’s School of Economics, Finance and Banking, said BUDI95 was a much-needed step to reduce the government's fiscal burden caused by widespread subsidy leakage.
“The savings from the implementation of the initiative can be channelled towards strategic investments, including the development of renewable energy and low-carbon technologies to support the nation’s target of achieving net zero emissions by 2050 under the National Climate Change Policy 2.0,” she told Bernama.
She also stressed that the move reflects a necessary restructuring of national spending towards sustainability, while increasing public awareness about the importance of fair, targeted subsidies that benefit those who truly need them.
Adilah highlighted that Malaysia remains one of Southeast Asia’s highest carbon emitters after Brunei and Singapore, and viewed BUDI95 as a transitional policy aligned with national decarbonisation goals.
However, she urged the government to ensure stringent oversight of the scheme to prevent abuse, such as identity theft or misuse of identification cards.
Echoing this sentiment, Associate Professor Dr Mazlan Ali of Universiti Teknologi Malaysia (UTM) said the initiative has already brought measurable financial relief, especially for lower-income groups.
“Some users now have lower spending than before. There are also those who belittle the amount saved, but to me, this is the government’s effort, and the people should show appreciation,” he said.
Mazlan noted that initial public reception has been largely positive, pointing to widespread praise on social media platforms as Malaysians expressed relief over lower fuel costs.
“I think the acceptance of BUDI95 has been overwhelming. We see today on social media, many are praising the government’s move as the lower fuel price has eased the burden of many,” he added.
Yet, the rollout has not been without confusion. Social media users have aired their frustrations over misunderstandings related to the 300-litre quota, with some mistakenly linking it to travel distance rather than fuel volume.
Others, unsure how the subsidy is reflected in pump pricing or final receipts, have misinterpreted payment amounts.
These issues have sparked an unlikely surge in amateur arithmetic lessons online, with influencers and everyday Malaysians helping clarify subsidy mechanics, especially for those unfamiliar with calculating fuel costs by litre instead of ringgit.
Some confusion also arose at petrol stations, where even cashiers were unsure of how the subsidy was being applied. Reports surfaced of staff incorrectly scanning QR codes or providing misleading calculations, leading to temporary misinformation about “bonus litres” or unexpected savings.
For now, the government encourages users to switch from calculating fuel purchases in ringgit to litres to avoid further confusion, and to track usage more accurately under the 300-litre monthly cap.
Despite teething issues, many Malaysians see BUDI95 as a promise delivered — one that provides targeted relief while also positioning the country on a firmer, more sustainable economic path. - October 2, 2025
