The government is considering reducing the RON95 subsidy quota under Budi95 to 200 litres amid rising fuel prices and subsidy pressures.
PETALING JAYA: It appears the era of the 300-litre safety net may be drawing to a polite close.
The government is reportedly mulling over a plan to trim the RON95 petrol subsidy entitlement under the BUDI programme, a move prompted by the volatile global fuel market and the ongoing conflict in the Middle East.
According to The Edge, citing sources, the current 300-litre monthly quota is expected to be reduced to 200 litres.
READ MORE: Malaysia raises RON97 and unsubsidised RON95 prices by 60 sen
An official announcement is anticipated this week, with the revised quota for subsidised fuel—fixed at RM1.99—likely to take effect from April 1.
For those with a heavy right foot, the maths is simple: once that 200-litre limit is breached, consumers will pay the market-determined floating price.
To put that in perspective, the unsubsidised RON95 price is set to rise by 60 sen per litre to RM3.87 for the period of March 26 March to April 1.
Since March 11, this market price has climbed twice, marking a total increase of RM1.20—nearly 45% up from the original RM2.67.
The pressure isn’t limited to RON95. Retail prices for RON97 and diesel in Peninsular Malaysia have recorded increases for three consecutive weeks; RON97 is set to rise to RM5.15 per litre, while Peninsular diesel will increase to RM5.52 from RM3.12.
The Finance Ministry views the move as a “necessary fiscal measure.”
Prime Minister Datuk Seri Anwar Ibrahim recently warned that the national subsidy bill could reach RM24 billion this year if global crude prices remain above US$110 per barrel.
At the time of writing, Brent crude is trading at US$103.35 per barrel. While that is a softer figure than the US$120 peak seen on March 9, prices remain significantly elevated—up more than 30% compared with the US$70.84 recorded on Feb 26, prior to the outbreak of the conflict.
The Sun Malaysia
