Government Considers Slashing Budi95 Quota To 150L As Subsidy Costs Rise

Prime Minister Datuk Seri Anwar Ibrahim previously announced a proposal that could potentially cut T20 income earners from subsidised fuel altogether.

The Malaysian government is considering a tighter RON95 fuel subsidy quota for citizens as part of broader efforts to manage fuel supply, improves subsidy efficiency, and reduce leakage.

Should the plan come into effect, the current monthly quota of 200 litres will be reduced to 150 litres. The Budi95 fuel subsidy programme started off with a 300-litre quota for all Malaysians.

According to a New Straits Times report, deputy finance minister Liew Chin Tong said the proposed adjustment is based on consumption data, which shows that a majority of Malaysians use significantly less than the current subsidised threshold.

“The data consistently shows 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 said at the Affin Market Outlook 2026: Propelling Malaysia Forward event in Kuala Lumpur today (12 May).

On Monday (11 May), Prime Minister Datuk Seri Anwar Ibrahim informed the public of a proposal to review RON95 fuel subsidies for the T20 income group, potentially cutting them off from the subsidy altogether.

The proposal came amid calls for petrol subsidies to be reserved for lower- and middle-income groups.

Anwar also suggested that the fuel subsidy review is being adjusted in a way that does not affect the upper-middle class.

Economists: Government should not use income as basis for exclusion

Contrary to this decision, economists warn that using income alone as the basis for exclusion oversimplifies the realities faced by many urban households and could ultimately undermine public trust in subsidy rationalisation efforts.

Meanwhile, critics argue that the move generalises all T20 earners as financially comfortable, despite many grappling with high living costs, housing commitments, childcare expenses, and other financial obligations in major cities.

Samirul Ariff Othman, a senior consultant at Global Asia Consulting, said the best policy is not one that punishes income but one that reduces waste, protects necessity, discourages excess, and preserves public trust.

He also said the policy debate should move beyond the simplistic question of who earned more, and towards identifying who consumed more subsidised fuel and who could reasonably absorb market pricing.

According to Samirul, a fairer mechanism would be a tiered or quota-based approach, where all citizens retain access to a basic subsidised fuel quota for essential mobility, while consumption beyond that limit is charged closer to market rates.

A model such as this would protecct ordinary commuting needs while discouraging excessive consumption, making the policy less discriminatory than excluding an entire income bracket, he added.