Kuala lumpur: The government is currently shouldering an estimated RM4 billion per month in petrol and diesel subsidies under the BUDI MADANI RON95 (BUDI95) and BUDI Diesel programmes as global crude oil prices surge.
According to BERNAMA News Agency, the Ministry of Finance (MOF) announced that the ongoing conflict in West Asia has intensified pressures on the global energy market, with crude oil prices surpassing US$100 per barrel. This rise has substantially increased the nation's subsidy obligations.
In January 2026, subsidies for RON95 and diesel reached approximately RM0.7 billion. The MADANI government's decision to maintain the BUDI95 price at RM1.99 per litre for the public and diesel at RM2.15 per litre for selected groups has continued to elevate the subsidy burden. When Brent crude oil was priced at US$90 per barrel, monthly subsidies were approximately RM3 billion. With oil prices now at US$100 per barrel, the expected subsidy bill has climbed to around RM4 billion per month.
In a special address, Prime Minister Datuk Seri Anwar Ibrahim stated that effective April 1, 2026, the BUDI95 eligibility quota would be temporarily adjusted from 300 litres to 200 litres per month in response to the West Asia conflict. Despite this change, the subsidised RON95 price will remain unchanged at RM1.99 per litre.
The MOF highlighted that the MADANI government has proactively implemented measures to secure the country's fuel supply amidst global supply uncertainties. These strategies are intended to manage supply pressures without impacting the majority of consumers, ensuring a stable fuel supply over a more extended period. While the current fuel supply remains controlled, the government is committed to strengthening supply security and managing demand prudently.
The adjustment in the BUDI95 eligibility cap is a temporary response until global supply conditions stabilize. The MOF noted that nearly 90 per cent of eligible users consume less than 200 litres monthly, with average consumption around 100 litres, thus remaining unaffected by the cap adjustment. The additional quota for e-hailing operators will stay at 800 litres per month.
Additionally, the MOF plans to enhance enforcement to prevent subsidy misuse and encourage careful fuel consumption. They expressed readiness to suspend BUDI95 eligibility in instances of abuse or misuse of subsidised RON95. The government will keep a close watch on global developments and undertake necessary actions to ensure the country's energy supply is stable and adequate for its citizens.