KUALA LUMPUR: The government remains committed to the targeted subsidy approach for RON95 petrol under the BUDI MADANI RON95 (BUDI95) programme and rejects the World Bank’s proposal to raise it to market price, said Prime Minister Datuk Seri Anwar Ibrahim.
He said the RON95 targeted subsidy is a prudent measure that has successfully reduced government expenditure without burdening the people.
"The (World Bank’s) proposal is to increase the price to RM2.65 per litre for all petrol, and then provide subsidies for certain categories. Therefore, my fellow Cabinet members and I rejected the proposal and lowered the RON95 price to RM1.99 per litre for Malaysian citizens and RM2.60 per litre for foreigners.
"This shows that our (the government’s) approach is prudent and we take actions that can benefit the people. Alhamdulillah, the targeted RON95 subsidy throughout Malaysia has received very good and positive response,” he said.
He said this when tabling the Supply Bill (2026) in the Dewan Negara today.
Anwar, who is also the Finance Minister, said comprehensive subsidy targeting also ensures that the majority of citizens continue to receive assistance while combating subsidy leakages to non-citizens and business use.
"When the government ended subsidies for chicken and eggs and floated their prices, the government ensured prices remained stable, supply was sufficient, and the people were not affected.
"The MADANI government aims to target subsidies and achieve savings of around RM15.5 billion a year through the floating of chicken and egg prices, as well as the targeting of electricity, diesel, and RON95 subsidies,” Anwar said.
Meanwhile, he said the MADANI government chose, in Budget 2026, not to introduce new taxes, and instead to improve governance, target subsidies, and strengthen tax compliance.
"Normally, when additional spending is announced, the government would impose new taxes, but this is a situation where Malaysia can increase allocations significantly without introducing new taxes, and this is due to targeted subsidies and several other measures such as savings and preventing leakages.
"If the federal government can do this, I would like to urge the state governments to act the same and to be cautious so that new measures and taxation do not burden the people,” he explained. - Bernama
