KUALA LUMPUR – The Malaysian government has announced savings of RM800 million since the introduction of the targeted fuel subsidy programme, BUDI95, which was launched on 30 September 2025.
Prime Minister Anwar Ibrahim, who is also Finance Minister, said the initiative marks a significant policy shift after more than two decades of debate over subsidy reforms.
Previous administrations had discussed the issue but refrained from implementation due to political sensitivities.
The MADANI government, however, has moved forward with the plan, aiming to ensure subsidies benefit only Malaysians.
The BUDI95 programme allows citizens to purchase RON95 petrol at RM1.99 per litre, while non-citizens and foreign-registered vehicles are required to pay higher rates.
This targeted approach has effectively curbed leakages that previously benefited more than 3.5 million foreigners and prevented tens of thousands of litres of fuel from being smuggled out of the country.
Savings generated from the programme have been channelled back to the people through initiatives such as the Rahmah Cash Contribution (STR) and the Rahmah Basic Contribution (SARA).
In addition, funds have been allocated to upgrade clinics and hospitals, improve road networks, and strengthen national infrastructure.
Transport Minister Anthony Loke recently clarified that eligibility for BUDI95 is not linked to traffic offences, following public confusion over reports suggesting otherwise. He stressed that the subsidy scheme operates independently of licence blacklisting or unpaid summons.
The government has highlighted that the subsidy reform is not only about financial savings but also about fairness and sustainability.
In 2023, Malaysia’s fuel subsidies reached RM38 billion, with RON95 alone costing RM20 billion. Analysts noted that a significant portion of these subsidies disproportionately benefited wealthier individuals and foreign nationals.
The new system ensures that Malaysians with valid identification enjoy the benefits, while reducing fiscal strain on the treasury.
Anwar described the move as a “bold step” that reflects the government’s commitment to responsible governance.
“Every ringgit saved is channelled back to the people,” he said, underscoring the administration’s pledge to reinvest in public welfare.
Observers believe the success of BUDI95 could serve as a blueprint for future reforms, balancing social equity with economic sustainability.
The initiative has been widely seen as a turning point in Malaysia’s long-standing debate over subsidy targeting, with its impact already visible in healthcare, infrastructure, and direct financial assistance.
