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THE government has provided a detailed explanation for its implementation of the BUDI95 petrol subsidy program, which sets a subsidised price of RM1.99 per litre for the first 300 litres of RON95 petrol while reverting to market rates for usage beyond that threshold.
Speaking in the Dewan Negara today, Finance Minister II Datuk Seri Amir Hamzah Azizan said the tiered pricing approach is designed to ensure that fuel subsidies are targeted effectively and that public funds are used efficiently.
Responding to a parliamentary question from Senator Dato’ Haji Abdul Halim Suleiman, Amir outlined the rationale for the subsidy structure, emphasising the need to move away from broad, untargeted fuel subsidies that previously allowed all users, including non-citizens, to benefit from subsidised petrol at RM2.05 per litre.
“The practice of bulk subsidies is not aligned with the principle of directing support to those who truly need it, particularly Malaysian citizens, and it places additional pressure on the country’s fiscal position,” he said.
Under the BUDI95 program, all Malaysian citizens holding valid MyKad identification and active driving licences are eligible to purchase up to 300 litres of RON95 petrol per month at RM1.99 per litre.
Usage beyond this quota is charged at the market rate, which, for the week of 11 to 17 December 2025, is set at RM2.64 per litre through the Automatic Pricing Mechanism reviewed weekly by the Finance Ministry.
Public transport and goods vehicles continue to receive subsidised fuel at RM2.05 per litre through the Government’s Fuel Control System, while non-citizens and commercial users pay unsubsidised rates.
The ministry cited pre-program data showing that 99 percent of Malaysians consume less than 300 litres of petrol monthly, making the quota sufficient to meet the majority of personal usage.
Since the program’s introduction, BUDI95 recipients for personal use have averaged 98 litres per month, only 33 percent of the allocated quota.
“This means that the daily travel needs of most Malaysians are fully protected under the RM1.99 per litre rate,” Amir said.
Officials also explained why the government opted against a graduated pricing structure, such as RM2.10 or RM2.30 per litre after the quota.
“Setting tiered prices above the quota would maintain elements of inefficient subsidy, increasing leakage risks and providing little support to strengthening the government’s fiscal position,” Amir added.
The ministry concluded by affirming that the government will continue to monitor usage patterns and adjust subsidy limits as necessary to ensure that the targeted RON95 subsidy remains effective, equitable, and fiscally sustainable.
“The implementation of the BUDI95 targeted subsidy policy will be continuously refined and reinforced for the benefit of the people and the long-term health of the national budget,” the statement added. - December 11, 2025
