BUDI95 Temporary Adjustment Seen As Pragmatic, Helps Maintain Public Confidence - Analysts

KUALA LUMPUR, March 28 (Bernama) -- The temporary adjustment to the Budi MADANI RON95 (BUDI95) programme should not be viewed negatively, as the public continues to enjoy stable subsidised fuel prices, despite facing global pressures.

The measure, which only involves reducing the subsidy limit from 300 to 200 litres per month, without affecting the RON95 price, which remains at RM1.99 per litre, reflects the government’s approach in balancing fiscal needs with the welfare of the people.

A lecturer at the School of Social Sciences, Universiti Sains Malaysia (USM), Prof Datuk Dr Sivamurugan Pandian, is of the view that the decision, which will take effect on April 1, reflects the government’s pragmatic approach in ensuring that subsidies are better targeted without affecting the majority of users, given that the average petrol consumption among Malaysians is about 100 litres per month.

However, the effectiveness of the initiative depends on clear communication and policy consistency in the medium term.

“This adjustment can be seen as a transition period to ensure subsidies are better targeted. Public acceptance depends on transparent explanations that it is not a withdrawal of benefits,” he told Bernama.

According to him, in the short term, the measure helps maintain confidence, as it shows that the government is responsive, but in the medium term, public confidence will depend on a clear subsidy direction and tangible evidence of its impact on the cost of living.

He also emphasised that the government’s efforts to ease cost-of-living pressures include Sabah and Sarawak, particularly through maintaining diesel prices in both states.

He said that the measure is important, given the high usage of diesel in the transportation and logistics sectors in those regions.

“Maintaining the price of basic fuel helps stabilise cost-of-living expectations, especially in areas that depend on diesel,” he said.

During a special address yesterday, Prime Minister Datuk Seri Anwar Ibrahim said the targeted subsidy adjustment was made after the government reviewed the average BUDI95 usage of about 100 litres per month, with nearly 90 per cent of the population using less than 200 litres monthly, thus not affecting users.

Anwar also announced that Sabah and Sarawak will continue to enjoy subsidised diesel, at a rate of RM2.15 per litre.

Meanwhile, the executive director of the Asia-Europe Institute, Universiti Malaya (UM), Distinguished Prof Datuk Dr Rajah Rasiah, said that maintaining the RON95 price is important in controlling inflation and reducing pressure on consumers.

He said the measure provides relief to the public at a time when the country needs to import oil to meet domestic demand.

“When global oil prices rise, the government’s subsidy burden also increases. However, maintaining prices helps prevent cost increases for the people,” he said.

He added that fuel subsidies have a broad impact on the economy, as energy costs influence the prices of goods and services.

According to him, the assistance should continue in a targeted manner to reduce income disparities and protect low-income groups without burdening the country’s finances.

At the same time, he stressed the need to strengthen the development of alternative energy in light of uncertainties in global oil supply, including the risk of disruptions along key routes such as the Strait of Hormuz.

He added that increasing the use of renewable energy, which is currently still low, is crucial to reducing the country’s dependence on fossil fuels in the long term.

-- BERNAMA