The bitter pill we take now to save Malaysia long-term

2026-03-28 - 01:50

Like many Malaysians, I was delighted when the government introduced the BUDI95 initiative on Sept 30 last year, allowing us to purchase RON95 petrol at RM1.99 per litre instead of RM2.05 previously. As with any consumer, I welcomed the lower price, hoping it would remain indefinitely, if not reduced further. However, since the outbreak of the West Asian conflict, it appears we must now face the reality that maintaining the RON95 price at RM1.99 may no longer be sustainable. The world is no longer what it once was. Although Malaysia is an oil producer, we remain reliant on imported fuel to meet domestic demand. When global oil prices rise, the impact is twofold: higher import costs, and increased subsidy obligations for Putrajaya. The figures can be quite staggering. The government said recently that its monthly expenditure on fuel subsidies has hit RM4 billion, close to six times the RM700 million spent in January. Clearly the continuation of the BUDI95 subsidy scheme at its present price will hit the nation’s finances severely. The matter is clearly something that the government needs to keep an eye on. In matters of personal health, prevention is always better than cure. We are encouraged to eat well, exercise regularly, and maintain a disciplined lifestyle. Though these habits may seem difficult at first, they are vital in helping us avoid the burden of exorbitant medical bills in the future. When Prime Minister Anwar Ibrahim announced a reduction in the monthly BUDI95 quota from 300 to 200 litres, it occurred to me that the same principles also apply when it comes to the health of the nation’s economy. Happily, the government has not withdrawn the aid altogether. It simply is adjusting the dosage or changing the medication to suit the patient’s present condition. It may be a bitter pill to swallow, but the government’s actions are justifiable and necessary. What is important is that much-needed subsidies will continue to reach those truly in need. The government’s approach to diesel subsidies gives a clearer picture of this. In the peninsula, the price of unsubsidised diesel has hit RM5.52 per litre. However, Putrajaya’s BUDI Individu and BUDI Agri-Komoditi programmes have seen an increase in monthly aid from RM200 to RM300. That means, farmers and smallholders have not been left in the lurch. Additionally, the fleet card subsidy system helps the transport and logistics sectors to keep operational costs low, preventing a chain effect on the price of goods. Reverting to the BUDI95 issue, it is heartening to note that the government is maintaining RON95 at its present heavily-subsidised price when most of our neighbouring countries have raised theirs. The only difference is that the monthly entitlement has been reduced. That, no doubt, would raise concerns. But data shared by the prime minister paints a more balanced picture. Apparently, the average Malaysian uses less than 100 litres of RON95 per month, and nearly 90% use less than 200 litres. As for me, my daily 80km work commute from Puncak Alam to Petaling Jaya sees me travel about 1,600km per month, and results in a monthly consumption of about 80 litres of petrol. My Aidilfitri travels this month have still left me with a quota balance of 50 litres, and even if I do use that up, I can dip into my wife’s 200-litre quota since she doesn’t drive as much. That gives me the satisfaction of knowing that the majority of Malaysians, especially those in B40 group, are unlikely to be affected by the reduction in quota. They can still enjoy the subsidised price of RM1.99 per litre for RON95, thus avoiding a surge in cost of living. Even e-hailing drivers are protected, with their monthly 800-litre quota maintained. Naturally, any change to the subsidy scheme would cause unease. It’s like starting a new diet or exercise routine. It may feel tough now, but we know we must stick to it to avert a greater evil. There is also a greater lesson to be learnt. Our world today is fraught with uncertainty. Geopolitical conflicts, supply chain disruptions and commodity price surges can all happen without warning. Although the BUDI95 quota adjustment is temporary, it also serves as a lesson to the rakyat that we must be better prepared to face future crises. For its part, the government appears intent on striking a balance between the nation’s economic needs and its social responsibilities, while managing public finances prudently. It’s approach may not be perfect, and there is bound to be room for improvement, yet, it takes real courage to make tough decisions with the nation’s long-term wellbeing in mind. Hopefully, the bitter pill we swallow today will help prevent a future “disease,” safeguarding not only ourselves but also generations to come. The writer is the editor of FMT’s Malay News Desk. The views expressed are those of the writer and do not necessarily reflect those of FMT.