BUDI95 Petrol Subsidy to Save Govt RM2.5 Billion to RM4 Billion

The government’s BUDI MADANI RON95 (BUDI95) targeted petrol subsidy programme is expected to generate savings of between RM2.5 billion and RM4 billion a year, Finance Minister II Datuk Seri Amir Hamzah Azizan told the Dewan Rakyat on Wednesday, The Edge reported.

He said the total fuel subsidy savings for this year would be finalised by year-end, taking into account actual transaction adjustments, weekly market prices, currency exchange rates and verified consumption volumes.

Where the BUDI95 Savings Come From

Amir Hamzah said the savings came from comprehensive implementation of targeted subsidies, including reducing leakage to non-citizens and ineligible consumer categories, and curbing spending that did not align with the government’s social protection objectives.

He said the savings would be repurposed to strengthen targeted assistance such as Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA), as well as other initiatives that directly benefit the people.

He was replying to Muhammad Fawwaz Mohamad Jan (PN-Permatang Pauh), who asked for the actual fuel subsidy savings this year and the rationale for cutting the BUDI95 quota from 300 litres to 200 litres before raising it again on Sept 1, 2026.

BUDI95 Quota Restored to 300 Litres

Amir Hamzah said that following more stable fuel supply conditions, and with current subsidy expenditure at about RM4 billion a month, the government reinstated the BUDI95 eligibility limit to 300 litres a month effective Sept 1, 2026.

He said the government takes a responsive, data-driven approach, monitoring global energy supply and prices, the country’s fiscal position and public feedback.

Budi Diesel Transfers

Separately, Amir Hamzah told the Dewan Rakyat that nearly 21,700 applications to transfer Budi Madani Diesel entitlements had been approved as of Oct 27, The Star reported. As at Oct 26, more than 27,200 jeeps and pickups owned by over 19,350 companies qualified for subsidised diesel under the Subsidised Diesel Control System, which uses fleet cards.

Fiscal Deficit Target

Earlier this month, Amir Hamzah said Malaysia aims to bring its fiscal deficit below 3% of gross domestic product within the next two years through fiscal consolidation, targeted subsidy reforms and greater private-sector participation. He said the deficit had been reduced from 6.4% of GDP about five years ago to 3.7% last year, The Edge reported.

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