Malaysia Successfully Implements Budi95 Targeted Petrol Subsidy Nationwide

Nationwide Rollout of Budi95 Subsidy Commences

Malaysia has officially commenced the full implementation of its Budi95 targeted petrol subsidy scheme, effective September 30, 2025. The initiative aims to ensure that only eligible Malaysian citizens benefit from subsidised RON95 petrol, which is now priced at RM1.99 per litre. Reports from Kuala Lumpur indicate a largely smooth start, with motorists successfully adapting to the new verification process at petrol stations across the city.

The Budi95 programme, part of the broader BUDI Madani initiative, marks a significant shift from the previous blanket subsidy system. It is designed to address leakages caused by smuggling and the provision of subsidies to non-citizens. The unsubsidised market price for RON95 petrol is estimated to be around RM2.60 per litre, which non-citizens and large corporations will now pay.

Phased Implementation and Eligibility Criteria

The full rollout on September 30, 2025, was preceded by a phased introduction. Police and military personnel were the first to benefit from the subsidised price starting September 27, 2025, followed by recipients of the Sumbangan Tunai Rahmah (STR), largely from the B40 income group, on September 28, 2025.

Eligibility for the Budi95 subsidy is extended to all Malaysian citizens aged 16 and above who possess a valid MyKad with a functioning chip and an active driving licence. This includes Competent Driving Licences (CDL), Probationary Driving Licences (PDL), and Learner's Driving Licences (LDL). There is no income limit for eligibility. However, driving licences expired for more than three years are not eligible, while those expired for less than three years may qualify upon renewal. Foreign-registered vehicles are prohibited from purchasing RON95, and foreigners driving Malaysian-registered vehicles can buy RON95 but without the subsidy.

Operational Mechanism and Monthly Quota

Motorists can access the subsidised fuel by verifying their eligibility using their MyKad at the petrol pump or cashier. Additionally, major fuel apps such as Setel, CaltexGo, and Touch 'n Go eWallet have integrated the Budi95 scheme, allowing for a one-time MyKad verification within the app for seamless transactions. Petrol stations nationwide have installed MyKad readers to facilitate the process.

Each eligible Malaysian is entitled to a monthly quota of up to 300 litres of RON95 petrol at the subsidised price. This quota is renewed at the beginning of each month. E-hailing drivers are exempt from this 300-litre cap and can apply for additional allocations to support their livelihood.

Financial Impact and Initial Observations

The Malaysian government estimates that over 16 million citizens are eligible for the Budi95 subsidy. The Ministry of Finance projects annual savings of between RM2.5 billion and RM4 billion from the removal of blanket subsidies, with an allocation of approximately RM11 billion to cover the price difference. These savings are intended to be reinvested into other targeted assistance programmes.

Initial reports from Kuala Lumpur on the full implementation day noted a 'busy but largely smooth start' at petrol stations, with 'minor queues' and 'no major complications'. Pump attendants were available to guide motorists through the new system, and the verification process was described as 'smooth and hassle-free'. As of 7 PM on September 29, the scheme had already recorded RM43.7 million in purchases, covering 21.8 million litres of RON95 petrol, with nearly 912,000 recipients from the initial phases having completed transactions.