In a bold move to reform fuel subsidies, the government has introduced the BUDI95 program, sparking intense debate and raising crucial questions about fairness and efficiency. This initiative aims to ensure that fuel subsidies reach those who need them most, but is it truly equitable?
The BUDI95 Debate: Targeted Subsidies or Inequality?
The Finance Minister II, Datuk Seri Amir Hamzah Azizan, defended the tiered pricing approach during a recent address in the Dewan Negara. He emphasized the need to shift away from blanket subsidies, which previously benefited all users, including non-citizens, at a rate of RM2.05 per litre.
"The old system was not in line with the principle of targeted support," Amir stated, adding that it strained the country's fiscal position.
Under BUDI95, Malaysian citizens with valid MyKad and driving licenses can purchase up to 300 litres of RON95 petrol monthly at RM1.99 per litre. Beyond this quota, the market rate of RM2.64 per litre applies.
But here's where it gets controversial: public transport and goods vehicles still receive subsidised fuel at RM2.05 per litre, while non-citizens and commercial users pay the full price.
The ministry justifies this by citing data showing that 99% of Malaysians consume less than 300 litres monthly, making the quota sufficient for most.
And this is the part most people miss: since the program's launch, personal BUDI95 recipients have averaged only 98 litres per month, a mere 33% of the allocated quota.
"This proves that the daily travel needs of most Malaysians are covered by the RM1.99 rate," Amir explained.
However, the government opted against a graduated pricing structure after the quota, maintaining that it would perpetuate inefficient subsidies and increase leakage risks.
The ministry concluded by assuring continued monitoring and adjustments to ensure the targeted RON95 subsidy remains effective and fiscally sustainable.
"The BUDI95 policy will be refined for the people's benefit and the national budget's long-term health," the statement emphasized.
So, is this a fair system? Does it truly benefit those who need it most? We want to hear your thoughts in the comments. Is this a step towards a more equitable Malaysia, or does it create a new set of inequalities?
[Date: December 11, 2025]
