A significant shift in Malaysia’s fuel subsidy framework is now in effect, with the nationwide implementation of the BUDI95 initiative commencing at midnight. This program grants over 16 million eligible citizens access to RON95 petrol at a fixed price of RM1.99 per liter, a notable reduction from the previous subsidized rate of RM2.05. The rollout marks a pivotal moment in the government’s effort to reform its subsidy system, transitioning from a broad-based model to one that is more targeted and efficient.
The initiative was first introduced in a phased manner, initially benefiting 300,000 members of the Malaysian Armed Forces and the Royal Malaysia Police. This was subsequently expanded to include more than five million recipients from the B40 demographic under the Sumbangan Tunai Rahmah (STR) program. The initial response has been highly encouraging, with transactions totaling RM3.7 million recorded on the first day alone, demonstrating strong uptake among the eligible groups and validating the program’s initial phase.
A central feature of BUDI95 is its monthly allocation of 300 liters per qualified individual, a volume deemed sufficient for 98 to 99 percent of the Malaysian population according to current usage data. This ensures that the vast majority of citizens, including daily commuters and families, continue to enjoy affordable fuel prices. The new system is designed to be straightforward for users, requiring only a MyKad or a valid driver’s license for automatic eligibility verification at the point of purchase, with the option to use a preferred digital wallet application.
This targeted approach directly addresses the shortcomings of the previous bulk subsidy system, which was fiscally unsustainable with annual expenditures reaching approximately RM20 billion in 2023 and 2024. The old model was also prone to significant leakage, with over 20 percent of subsidized fuel estimated to have been accessed by ineligible parties, including non-citizens and commercial entities. By restricting the subsidy to eligible citizens, BUDI95 effectively closes these loopholes and prevents such misuse.
Ultimately, BUDI95 represents more than just a fuel price control mechanism; it symbolizes a broader transformation towards a more prudent and equitable fiscal policy. The substantial savings generated from this reform are expected to be reallocated to critical national sectors such as education, healthcare, and social development. This initiative successfully balances public welfare with fiscal responsibility, creating a more sustainable economic model for the nation’s future. For further information, the public is encouraged to consult the official BUDI95 portal or contact the dedicated helpline.