Budi95 quota hike risks 0.6pct GDP subsidy hit
KUALA LUMPUR: The restoration of the monthly Budi95 subsidised petrol quota to 300 litres and the higher Budi Diesel allocation could increase Malaysia’s subsidy spending by up to 0.6 per cent of gross domestic product (GDP) for the remainder of 2026, according to Hong Leong Investment Bank Bhd (HLIB).
Malaysia's fiscal deficit target for 2026 is set at 3.5 per cent of GDP, and Hong Leong Investment Bank estimates that the increased Budi95 and Budi Diesel fuel subsidies could raise subsidy spending by up to 0.6 per cent of GDP for the remainder of the year. This estimate is based on the assumption that all eligible Budi95 users use the full 300-litre monthly allocation and around 700,000 eligible vehicles use the entire 400-litre Budi Diesel entitlement each month.
However, the bank notes that actual usage data from October 2025 to June 2026 shows that more than 99 per cent of Budi95 users consistently consume less than 200 litres of RON95 per month, suggesting the actual fiscal impact may be lower than the maximum estimate.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
