Kuala lumpur: Malaysia’s targeted fuel subsidy reform under the BUDI MADANI RON95 (BUDI95) program is being hailed as a critical move in light of the ongoing West Asia crisis. The government aims to manage fiscal pressures more effectively while ensuring that subsidies are distributed in a more equitable manner.

According to BERNAMA News Agency, World Bank lead economist for Malaysia, Dr. Apurva Sanghi, highlighted that the adjustment of fuel quota limits under BUDI95 represents a more targeted approach. This strategy aims to ensure that subsidies are more fairly allocated across different income groups. Dr. Sanghi noted that Malaysia’s fuel subsidies have historically been regressive, disproportionately benefiting the top 10% and top 20% income groups, who are the major consumers of fuel.

The temporary adjustment of the individual monthly limit for BUDI95 petrol to 200 litres, down from 300 litres, is expected to address this imbalance. Dr. Sanghi emphasized that this adjustment is a necessary step in ensuring those who consume more pay accordingly. He made these comments during a briefing on Part 1 of the World Bank’s April 2026 Malaysia Economic Monitor (MEM), titled “Raising the Ceiling, Raising the Floor, Advancing Malaysia’s Jobs and Productivity Agenda.”

This policy change, effective from April 1, comes as a response to the fiscal challenges posed by the conflict in West Asia. Despite the adjustment in the quota, the subsidised RON95 price will remain at RM1.99 per litre. Dr. Sanghi also mentioned that while the BUDI95 reform is a short-term measure, further adjustments could be necessary if Malaysia’s fiscal situation worsens.