Anwar: BUDI95 Fuel Reform to Deliver RM2.5 Billion in Fiscal Savings
KUALA LUMPUR — Prime Minister Anwar Ibrahim said Malaysia’s targeted RON95 subsidy reform under the BUDI Madani (BUDI95) initiative is projected to generate at least RM2.5 billion in fiscal savings in 2026, reinforcing the government’s consolidation strategy.
The projected savings, he noted, are contingent on global crude oil prices and currency movements, but stem primarily from efforts to curb leakages and fuel smuggling across borders.
Speaking in the Dewan Rakyat, Anwar emphasised that the reform was carefully structured to avoid disrupting consumer purchasing experiences.
Seamless Implementation Through MyKad
The integration of MyKad into subsidy distribution ensures orderly and secure transactions without operational bottlenecks at petrol stations.
BUDI95 currently records an average of 3.1 million transactions daily — roughly 96 million per month — indicating smooth system performance.
The 300-litre monthly cap remains justified, as data shows most users consume significantly below that threshold.
Recycling Savings Into Domestic Support
Anwar stressed that the fiscal gains are recycled into social assistance programmes.
Under the Sumbangan Asas Rahmah (SARA) initiative, 22 million adult Malaysians received RM100 each, injecting nearly RM200 million into the domestic economy within two days.
The multiplier effect benefits local retailers and small and medium enterprises, strengthening grassroots economic activity.
Income-Based Targeting Considerations
The government explored narrowing eligibility through income thresholds, but lower thresholds risked impacting middle-income earners, while higher thresholds such as RM25,000 monthly income would affect only around two per cent of the population.
Fuel subsidies, he argued, differ from diesel and electricity subsidies due to their universal consumption profile.
Inflation and Structural Reform
While inflation eased to 1.4 per cent in 2025, Anwar acknowledged that cost-of-living pressures persist due to elevated import prices.
To cushion households, the government allocated RM15 billion for SARA and an additional RM30 billion to address ongoing price pressures.
The BUDI95 reform, he concluded, represents a calibrated long-term structural adjustment balancing fiscal responsibility with social equity.
-wilayah.com.my
