Malaysians will continue to pay RM1.99 per litre for RON 95 petrol under Budi95 even if the government’s fuel subsidy bill climbs to between RM42 billion and RM45 billion a year, prime minister Datuk Seri Anwar Ibrahim said today, as reported by Bernama.
Speaking at the Sentuhan Kasih Madani programme and the launch of the National Cost of Living Action Plan 2030 at the Hang Jebat Sports Complex in Krubong, Melaka, Anwar said global crude oil prices have risen to around US$120 to US$130 per barrel from about US$70 previously, and that the government is prepared to absorb the resulting increase in subsidy costs rather than pass it on at the pump.
“It is better for the government to bear the burden than to burden the people, our parents,” he said. Charging market prices for petrol would cost ordinary Malaysians an extra RM2 to RM3 a day, at least RM5 for some, and around RM10 a day for those who have to drive to work and send their children to school, the prime minister said.
Anwar said the aim is to shield low- and middle-income groups from higher fuel costs. He also rejected the view that generous subsidies make people overly dependent on government aid, saying that policy has to reflect the realities faced by low-income households.
The RM42 billion to RM45 billion range is higher than the figure Anwar gave just five days ago. On October 19, at the finance ministry’s monthly assembly in Putrajaya, he said fuel subsidies were estimated at RM40 billion a year to keep RON 95 at RM1.99 per litre. In July, he told parliament that spending on petrol and diesel subsidies would approach RM40 billion in 2026, more than double the RM15 billion allocated under Budget 2026.
That RM40 billion estimate for this year was repeated by the finance ministry in a written parliamentary reply earlier this month, and Budget 2027, tabled on October 9, set aside another RM40 billion for fuel subsidies next year. BIMB Research has put the potential cost for 2026 at as much as RM52 billion, according to The Edge.
The figures so far show how the bill has moved through the year. Anwar told parliament in July that petrol and diesel subsidies ran at nearly RM800 million a month in January and February, and the finance ministry said in its reply this month that the Middle East conflict then pushed crude above US$120 per barrel and the monthly cost of petrol, diesel and LPG subsidies to almost RM5 billion in March and April. Finance minister II Datuk Seri Amir Hamzah Azizan has said the bill peaked at RM7.5 billion in April. It then eased to around RM3 billion a month between June and August as oil prices moderated, the ministry said.
For Budi95 itself, the finance ministry told parliament in June that 11.1 billion litres of fuel with a sales value of RM22.1 billion had been sold under the Budi Madani programme from its start at the end of September last year up to May 31 this year, of which RM11.2 billion was the cost of subsidies borne by the government.
The gap the government is covering remains wide. Unsubsidised RON 95 is priced at RM4.32 per litre this week, which means the government pays RM2.33 for every litre bought at RM1.99 under Budi95. The monthly Budi95 quota was restored to 300 litres on September 1, after being cut to 200 litres in April when oil prices spiked.
At the Melaka event, Anwar also said economic success should be measured by living standards and well-being, and not only by growth, investment and trade figures.
