Prime minister Datuk Seri Anwar Ibrahim said that the government is currently finalising a proposal for a more comprehensive targeted subsidy as part of Budi Madani RON95 (BUDI95) programme, particularly the rationalisation of RON95 fuel subsidies for the higher income group, New Straits Times reports.
He said the proposal is currently being reviewed by the Crisis Management Task Force under the National Economic Action Council (NEAC), chaired by Tan Sri Mohd Hassan Marican. “The proposal was tabled about a month ago by the task force chaired by Hassan. It has since been reviewed, and discussions were held on whether it should apply to the T5, T10, T15, or T20 income groups,” Anwar said.
“In principle, we agree, but we want to ensure it does not affect the upper-middle class. They are working on it, and I hope it will be finalised soon,” he added. Economists have previously estimated that the exclusion of the T20 group from the BUDI95 subsidy programme could save the government up to RM1.5 billion a month.
According to the Department of Statistics Malaysia (DOSM), the T20 classification is now represented by a household income of RM11,819 or higher, based on the 2024 Household Income Survey.
Calls for a revised subsidy programme came as a result of the ongoing energy crisis due to the Iran war, which saw prices for Brent Crude Oil surge past USD100 per barrel. The finance ministry recently said that government spending for petrol and diesel subsidies is now estimated at up to RM4 billion per month.
The income-based subsidy rationalisation has always been part of the conversation ever since the programme was floated by the government during the announcement of the 2025 national budget. Back then, Anwar said that the ‘cut-off’ would be for the T15 group, with 85% of Malaysians to be unaffected.
But when the programme finally rolled out late last year, the government has instead switched to a quota-based approach, where Malaysians with a valid MyKad will be entitled to 300 litres of subsidised RON95 fuel per month, priced at RM1.99 per litre – now temporarily reduced to a 200-litre monthly cap in response to rising fuel costs.
At the time of writing, non-subsidised RON95 petrol is priced at RM4.02 per litre, while RON97 is priced at RM4.90 per litre. B10 diesel meanwhile is currently priced at RM5.17 per litre without subsidies.
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