Kuala lumpur: The government has opted against implementing a floating price approach for fuel, a strategy proposed by the World Bank and several economic experts, due to concerns over its potential burden on the majority of the population, Prime Minister Datuk Seri Anwar Ibrahim confirmed.
According to BERNAMA News Agency, Prime Minister Anwar, who also serves as the Finance Minister, highlighted that the government has instead implemented targeted subsidies. This initiative has successfully protected 85 percent of the population and resulted in significant savings of RM6 billion for petrol and RM5 billion for diesel. Anwar emphasized that the government has set the price of BUDI95 at RM1.99 per litre to ensure that fuel consumption continues to benefit the public.
Anwar elaborated on the effectiveness of the BUDI95 initiative, noting a smooth and orderly execution with 3.1 million daily transactions. He pointed out that current usage is around 100 litres, despite the government's provision of up to 300 litres, and mentioned that 90 percent of BUDI95 users do not exceed 200 litres per month. This was in response to a query from Fong Kui Lun (PH-Bukit Bintang) during the Minister's Question Time in the Dewan Rakyat about the savings achieved through BUDI95 in 2025 and the projected savings for 2026.
The Prime Minister expressed that this initiative is a success story for the country, as few nations have taken a firm stance on targeted subsidies due to the associated risks and challenges in gaining public acceptance. He stressed the importance of phased implementation to protect the welfare of the majority.
Anwar added that if prices were floated, it would primarily impact families earning RM13,000 a month or more, while the rest would still receive assistance. He also noted the government's success in curbing smuggling syndicates to neighboring countries and commended the public for reporting attempts by foreigners to purchase RON95.
The targeted RON95 subsidy is expected to save at least RM2.5 billion this year, contingent on global crude oil price fluctuations and currency exchange rates. Anwar stated that fiscal savings have been redistributed to benefit the public, particularly through the Sumbangan Asas Rahmah (SARA) program.
Despite the overall reduction in leakage following the BUDI95 implementation, Anwar acknowledged some isolated cases that continue to be identified. He mentioned specific border areas such as Rantau Panjang, Tawau, and Perlis, which have recorded the highest leakages, prompting increased surveillance and enforcement in these regions to prevent revenue loss.