KUALA LUMPUR: Malaysia’s targeted fuel subsidy reform under BUDI MADANI RON95 (BUDI95) is a step in the right direction amid the West Asia crisis as the government seeks to better manage fiscal pressures while ensuring subsidies are distributed more efficiently.
World Bank lead economist for Malaysia Dr Apurva Sanghi, said adjusting fuel quota limits represents a more targeted approach, helping ensure subsidies are more fairly allocated across different income groups.
"Fuel subsidies in Malaysia are regressive, with the T10, T20 benefiting much more compared to others. And if you look at who consumes most of the fuel, it is the T10, T20 segment. In fact, they have been known to consume more than 200 litres.
"So now that the quota is temporarily adjusted to 200 litres, I think it is absolutely okay in terms of addressing the aggressivity that they pay more. That is definitely a step in the right direction, he told reporters at a briefing on Part 1 of the World Bank’s April 2026 Malaysia Economic Monitor (MEM), titled ‘Raising the Ceiling, Raising the Floor, Advancing Malaysia’s Jobs and Productivity Agenda’, today.
Beginning April 1, the individual monthly limit for the purchase of BUDI95 petrol will be temporarily adjusted to 200 litres per month from 300 litres per month previously, following the ongoing conflict in West Asia.
The subsidised RON95 price will remain unchanged at RM1.99 per litre.
Sanghi said the move for BUDI95 is a short-term measure, but if the fiscal situation worsens, further adjustments may be necessary. - Bernama
