As ongoing conflicts in the Middle East continue to put pressure on global crude oil prices, Malaysians may see a tightening of the BUDI95 subsidies. According to a recent report by The Edge, the government is planning on revising the monthly quota for subsidised RON95 petrol.
Citing unspecified sources, the publication revealed that the current 300-litre quota will be cut down to 200 litres. Moreover, the government could announce this change as early as this week, with the new quota taking effect in April.
While the price of subsidised RON95 petrol remains at RM1.99 per litre, consumers will be subject to the market-determined floating price once they exceed the limit for the month. At the moment, unsubsidised RON95 is priced at RM3.87 per litre.
This move may be necessary to maintain the BUDI95 subsidies, which could end up costing the government RM24 billion this year. Of course, this is assuming global crude prices remain above US$110 (~RM440) per barrel. Reducing the quota would be a way to manage the country’s finances in the short term.
Of course, an alternative would be to increase the price of subsidised RON95. However, Prime Minister Anwar Ibrahim already asserted that the government will continue to maintain the current RM1.99 price. In any case, the reduced quota may not affect the majority of users. A previous report revealed that the average consumption is around 83 litres a month. Furthermore, government figures indicated that 90% of citizens use less than 200 litres.
(Source: The Edge)
