Malaysia's BUDI95 Fuel Subsidy Program to Save Up to RM4 Billion Annually

Malaysia's Budi Madani RON95 (BUDI95) initiative is set to generate substantial annual savings, estimated between RM2.5 billion and RM4 billion, according to Second Finance Minister Datuk Seri Amir Hamzah Azizan. These savings, which are contingent on global crude oil prices, currency exchange rates, and actual consumption patterns, will not be held as fiscal surplus but will be directly channeled back to the people.

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The annual fiscal savings are subject to global crude oil prices, currency exchange rates, and actual consumption patterns.

Amir Hamzah explained that the fiscal savings from BUDI95 will enable the government to enhance targeted assistance for the broader population, thereby strengthening a more inclusive social protection framework. He highlighted that this includes a significant increase in allocations for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) to RM15 billion, the highest ever provided. Additionally, allocations for the Malaysian Welfare Department (JKM) programs have been raised to RM3.1 billion for the current year.

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These savings from BUDI95 are not kept solely in fiscal surplus but are reinvested back to the people.

Responding to a question from Senator Datuk Bobbey Suan about the program's impact, Amir Hamzah also noted that allocations for the Rahmah Madani Sales program, Bantuan Awal Persekolahan (BAP), and the My50 pass have been increased to help mitigate the rising cost of living. He also addressed concerns about consumption limits, stating that less than one percent of the population consistently uses over 200 liters of RON95, with average usage around 100 liters per month.

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This implementation allows the government to increase targeted assistance to the majority of the people in an effort to strengthen a more inclusive social protection network.