PM: Targetted subsidies, reduced leakages bring positive results
KUALA LUMPUR: The government spent RM11.2bil on RON95 fuel subsidies under the targeted Budi95 programme as of May 31 this year, with nearly 14 million Malaysians continuing to enjoy petrol at RM1.99 per litre, reveals the Prime Minister.
Datuk Seri Anwar Ibrahim said the subsidy covered 11.1 billion litres of RON95, with sales totalling RM22.1bil, with over half the cost borne by the government.
He said about 85% of the more than 16.5 million eligible Malay-sians were active Budi95 users.
Anwar said the programme’s MyKad-based verification system, linked to a central database, enabled subsidies to be channelled only to eligible Malaysian citizens while reducing leakages.
“The high participation rate shows that the MyKad verification mechanism is accessible to the majority of Malaysians and is functioning effectively operationally. At the same time, MyKad-based verification enables subsidies to be channelled to eligible citizens while reducing leakages,” he said in a written parliamentary reply yesterday.
Anwar said the implementation of Budi Madani, particularly Budi95, had shown positive results in terms of targeting accuracy, reducing subsidy leakages and protecting the purchasing power of Malaysians.
He said the programme marked the government’s shift from blanket subsidies to a more targeted approach, ensuring subsidy benefits were no longer enjoyed by ineligible parties such as non-citizens or those whose fuel consumption did not align with the programme’s social protection objectives.
On fiscal savings, Anwar said the targeted subsidy mechanism was expected to save the government between RM2.5bil and RM4bil annually, depending on global crude oil prices, exchange rates and actual fuel consumption patterns.
He said savings would not come at the expense of public protection but from reducing leakages to those not entitled to receive the subsidy.
“The fiscal space created will enable the government to strengthen programmes such as Sumbangan Tunai Rahmah (STR), Sumbangan Asas Rahmah (Sara) and other social initiatives that directly benefit the people,” he said.
Anwar said eligible Malaysians will continue to enjoy RON95 at RM1.99 per litre regardless of fluctuations in global fuel prices.
Based on actual consumption data, he said nearly 90% of eligible Malaysians used less than 200 litres of RON95 a month, with average monthly consumption at around 100 litres, indicating that the current eligibility threshold was sufficient for the vast majority of users without affecting their daily needs.
Anwar also said Malaysia’s spending on subsidies and social assistance was expected to increase in 2026, with allocations potentially rising by up to RM30bil due to global cost pressures.
He said a total of RM54.7bil has been allocated for 2026 for subsidies, assistance and incentives to safeguard the welfare of the people, while also stabilising prices of selected goods and services.
These include consumption, agriculture and education subsidies to help ease the financial burden faced by low- and middle-income groups, he said.
“The government spent more than RM70bil on total subsidies, assistance and incentives in 2024, while more than RM60bil was spent for the same purpose in 2025.
“However, following the crisis in the Middle East and rising subsidy costs, assistance and subsidies are expected to increase by up to RM30bil, bringing the 2026 allocation to a significantly higher level compared with spending in 2024 and 2025,” he said.
Anwar said the government remained committed to ensuring that subsidies and assistance reached the intended target groups.
Meanwhile, Anwar posted online that he had received a courtesy visit from four diplomatic officials who are set to assume their duties abroad.
He urged them to discharge their duties with integrity, professionalism and dedication for the sake of the people and country.
