When the Malaysian government first introduced the BUDI95 monthly petrol subsidy program, the monthly petrol quota was set to 300 litres. This was reduced to 200 litres following recent developments in the Middle East. It looks like the government is considering lowering it further, down to 150 litres, likely due to the rising costs of petrol, and in turn, the rising cost of the subsidy program.
The Edge cites Deputy Finance Minister Liew Chin Tong as saying that “the data consistently show that 80% of Malaysians use less than 200 litres. The next step is 150 litres [as] 60% of the population uses less than 150 litres”. Liew also said that the BUDI95 program should also be seen as a “demand management tool”, and therefore a move to conserve fuel supply. He argued that the country needs to ensure it has sufficient and stable domestic fuel supply if the situation in the Middle East drags on for longer than expected.
For now, there’s no timeline as to when that BUDI95 quota reduction will happen. But the proposed move follows the government considering plans to tighten fuel subsidy further by excluding the higher-earning T20 group. Liew maintains that the government wants to ensure that vulnerable groups continue to enjoy subsidised fuel access. This is especially for motorcyclists and lower-income households. On the former, Liew says “they use 50 litres per month. That is very important because if the precarious class is affected with high prices, you may have to pay a high political and societal price”.
Liew also says that the government is in the midst of planning a targeted subsidy mechanism for Sabah and Sarawak specifically for diesel. But over the long term, the country should accelerate investments in public transport, electrification and more compact urban planning to reduce long-term oil dependency.
(Source: The Edge)
