This temporary reduction in Budi95 quota comes amid rising Middle East tensions.
It appears the rumours are indeed true, as Prime Minister Datuk Seri Anwar Ibrahim has announced that the 300-litre monthly quota for RON 95 petrol under the Budi Madani fuel subsidy programme will be temporarily reduced to 200 litres. Revealed in a special broadcast yesterday evening, the revised quota will take effect from April 1st 2026.
Now despite the lower quota, it is worth highlighting that the price of subsidised RON95 will remain unchanged at RM1.99 per litre. Once the subsidised allocation is depleted though, users will need to pay the unsubsidised rate… which has risen by 60 sen to (a chilling) RM3.87 per litre this week.
In outlining the details, the prime minister noted that eligible e-hailing drivers will continue to enjoy a higher usage ceiling of 800 litres per month. As for diesel in Sabah and Sarawak, retail pricing remains unchanged at RM2.15 per litre, although temporary restrictions will be introduced in East Malaysia to combat smuggling and fuel leakages.
Providing further reassurance, Anwar — who also serves as finance minister — reiterated that 90% of RON95 users will not be affected by the reduced quota, adding that supply remains sufficient and stable. This aligns with earlier remarks by Treasury secretary-general Datuk Johan Mahmood Merican, who noted that 90% of those eligible for Budi95 consume less than 200 litres per month.
Interestingly though, it appears that new rules are in place such that private and light commercial vehicles now will be limited to 50 litres per purchase, while land public transport and goods vehicles of no more than three tonnes will be capped at 100 litres. Vehicles exceeding three tonnes, meanwhile, will be allowed up to 150 litres per purchase, with enforcement set to be strengthened to curb leakages.
Looking at the bigger picture, this adjustment could also be seen as an effort to stretch the subsidy pool further, allowing Malaysians to continue enjoying the RM1.99 per litre rate for a while longer. Earlier this month, the prime minister indicated that the current subsidised price could only be sustained for up to two months.
This concern is not without basis. Anwar has warned that fuel subsidies could cost the country as much as RM24 billion if global crude prices remain at $110 per barrel. For context, Brent crude climbed to around $110 per barrel in early March amid escalating tensions, before easing to about $100 more recently, still well above the roughly $70 recorded prior to the Iran conflict in late February.
Against this backdrop, it is also worth remembering that Malaysia is no longer in the same position it once was. While we remain a net energy exporter, the country has in fact become a net crude oil importer, with refineries increasingly reliant on imported crude for local petrol supply.
Even so, the situation locally remains relatively manageable for now. Unlike elsewhere, we are not yet seeing the kind of drastic measures being implemented in other countries. The Philippines for instance has already declared an energy emergency, while reports from Thailand indicate motorists are queuing for hours just to secure fuel.
