This reduction in RM 1.99 RON95 quota could come into effect as early as next week.
As petrol prices continue to skyrocket amid the ongoing turmoil in the Middle East, there are now whispers on the grapevine that the government may scale back the current fuel subsidy quota. Such is as recently reported by The Edge, the Budi95 allocation could be reduced from its current 300 litre cap to just 200 litres per month.
Insider sources have told the publication that the move could be announced as early as next week, with the revised quota potentially taking effect in April. Once the subsidised allocation is depleted, users will have to pay for unsubsidised RON95, which is now priced at RM3.87 per litre (up 60 sen) starting today.
Now obviously, this isn’t the most welcome news for heavier users. That said, the reduction may not impact the majority as much as expected. It has previously been reported that the average monthly consumption of subsidised fuel stands at just 83 litres, with 90% of Budi95 recipients using less than 200 litres per month.
Looking at the bigger picture too, this adjustment could also mean that the government is trying to stretch the subsidy pool a little further, allowing Malaysians to continue enjoying the current RM1.99 per litre price for a while longer. Earlier this month, Prime Minister (and Finance Minister) Anwar Ibrahim stated that Malaysia could only maintain this current subsidised price for up to two months.
He also 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 just before the Iran conflict began in late February.
Without wanting to sound overly preachy, it is worth remembering that Malaysia is no longer in the same position it once was. While we are still a net energy exporter, the country has become a net crude oil importer, with refineries increasingly reliant on imported crude for local petrol supply.
And at least for now, we’re not seeing the kind of drastic measures being implemented elsewhere. The Philippines has after all already declared an energy emergency, while reports from Thailand show motorists queuing for hours just to secure fuel.
The question that should be on everyone’s mind now is how long this relatively comfortable situation can last, and how Malaysians will cope if conditions inevitably worsen from here. Interesting times ahead indeed…
