Reducing BUDI95 quota a pragmatic move, say economists

2026-03-27 - 02:40

Authorities must ensure that traders do not manipulate prices just because of the lower BUDI95 quota, said Bank Muamalat chief economist Afzanizam Abdul Rashid. PETALING JAYA: Economists have welcomed the government’s decision to reduce the monthly quota for subsidised RON95 petrol under BUDI95 to 200 litres a month, describing it as a pragmatic move with minimal impact on the cost of living. However, Bank Muamalat chief economist Afzanizam Abdul Rashid said the authorities must step up efforts to monitor prices to ensure that traders do not manipulate these because of the lower BUDI95 quota. “The risk of profiteering is there. Traders who unreasonably raise their prices would affect the purchasing power of the people, especially the lower- and middle-income earners,” he told FMT. Afzanizam added that the crackdown on misappropriation and the smuggling of subsidised RON95, which has been maintained at RM1.99 a litre, must continue. Afzanizam Abdul Rashid. “Enforcement must be tightened further so that the subsidies truly reach the people and aren’t abused.” Ahmed Razman Abdul Latiff of Putra Business School also welcomed the reduced BUDI95 quota, saying it suits the people’s needs and current economic environment. “If there are several people in a household who qualify for BUDI95, their 200-litre quotas can be shared among themselves (according to those who need to use more),” he said. Ahmed Razman Abdul Latiff. Yesterday, Prime Minister Anwar Ibrahim said the reduction of the BUDI95 quota from 300 litres a month to 200 litres was an interim measure to deal with the impact of the Middle East conflict. Anwar, who is also the finance minister, added that the average usage under BUDI95 was only about 100 litres per month. He said many countries, including Malaysia’s neighbours, had raised fuel prices but that Putrajaya had maintained the price of subsidised RON95 at RM1.99 per litre. Anwar said the government would now be spending RM4 billion a month to maintain the subsidised RON95 and diesel prices. Diesel is still sold at the subsidised price of RM2.15 a litre in East Malaysia.