PUTRAJAYA: The government is bearing petrol and diesel subsidies estimated at up to RM4bil a month under the Budi95 and Budi Diesel programmes due to the rise in global crude oil prices, says the Finance Ministry.
It said the prolonged conflict in the Middle East has exerted pressure on global energy markets, with crude oil prices now exceeding US$100 per barrel, significantly increasing the country's subsidy burden.
Subsidies for RON95 petrol and diesel for January 2026 amounted to about RM0.7bil.
"With the Madani government's decision to maintain the Budi95 price at RM1.99 per litre for the rakyat and diesel at RM2.15 per litre for targeted groups, the subsidy burden continues to rise.
"Based on market prices two weeks ago, when Brent crude was around US$90 per barrel, petrol and diesel subsidies were estimated at RM3bil per month.
"Now, with crude oil prices reaching US$100 per barrel, the subsidy bill is estimated to rise to around RM4bil per month," the ministry said in a statement on Thursday (March 26).
In a special address on Thursday, Prime Minister Datuk Seri Anwar Ibrahim said the government would temporarily adjust the Budi95 eligibility quota from 300 litres to 200 litres per month effective April 1, 2026, but would maintain the subsidised RON95 price at RM1.99 per litre.
The ministry said the Madani government had taken early and targeted measures to ensure the country's fuel supply remains secure amid global supply uncertainties arising from the conflict.
"These proactive measures are implemented in a planned manner to manage current supply pressures without affecting the majority of consumers, while ensuring sufficient fuel supply for a longer period.
"Although the country's fuel supply remains under control for now, the government cannot adopt a wait-and-see approach in strengthening supply security and managing demand prudently," it said.
The ministry said the adjustment to the Budi95 eligibility cap is a temporary measure until global supply conditions stabilise.
"The adjustment takes into account that nearly 90% of eligible users consume less than 200 litres per month and will not be affected, with average monthly consumption at around 100 litres.
"Meanwhile, the additional quota cap for e-hailing operators will remain at 800 litres per month," it added.
According to the ministry, the government will strengthen enforcement to curb misuse and leakages of subsidies, while encouraging more prudent fuel consumption.
"The Finance Ministry will not hesitate to suspend Budi95 eligibility in cases of abuse or misuse of subsidised RON95.
"The government will continue to closely monitor global developments and take further measures to ensure the country's energy supply remains stable and sufficient for the rakyat," it said. – Bernama
