BUDI95 fuel quota back to 300 litres: How will this affect motorists?

As of September 1, the Malaysian government has increased the monthly subsidy limit for RON95 fuel under the BUDI Madani programme back to 300 litres. This change, effective from September 1, provides additional benefits to Malaysian motorists who need to travel long distances for their daily activities and small traders who rely on vehicles for their livelihoods. However, for those who use less than 200 litres of fuel per month, the immediate impact is minimal as their consumption was already within the previous limit.

The 300-litre quota refers to a monthly eligibility ceiling, not a free allocation of petrol. This means that a motorist who usually consumes 100 litres of fuel per month will still purchase only 100 litres from the government-subsidised quota. The higher limit allows eligible users to purchase up to 300 litres of RON95 at the subsidised price of RM1.99 per litre, provided they meet the programme's eligibility requirements.

The restoration of the higher quota aims to manage fuel supply more orderly, enforce the programme more effectively, and take into account Malaysia's strong economic performance and the government's financial capacity. It also acknowledges the needs of long-distance travelers and small traders who depend on vehicles to earn a living.

While the restored quota might lead to an increase in the government's subsidy bill, it is not guaranteed. The actual fiscal impact depends on how much additional fuel is purchased and the prevailing subsidy per litre. The government currently subsidises RON95 at RM1.83 per litre, meaning that a 50-litre increase in consumption, for example, would translate to a subsidy cost of RM91.50.

For most motorists, the change may have little immediate effect as their monthly consumption is already below 200 litres. However, for those who regularly exceed the 200-litre limit, the restored quota could result in significant savings. For instance, a motorist using 250 litres of fuel per month would have 50 litres beyond the 200-litre ceiling, resulting in a subsidy of RM91.50 for that additional consumption. The actual subsidy cost would change if the unsubsidised RON95 price fluctuates from week to week.