KUALA LUMPUR (March 26): Malaysia will cut the standard monthly subsidised fuel quota under its Budi95 scheme to 200 litres from 300 litres starting from April 1, as its subsidy bill hits RM4 billion per month amid surging fuel prices following the conflict in Iran and the subsequent blockade of the Strait of Hormuz.
Prime Minister Datuk Seri Anwar Ibrahim announced the decision via a live telecast on Thursday, confirming an earlier report by The Edge Malaysia about the impending quota adjustment as the blockade disrupted global supply chains, driving Brent crude past US$100 per barrel — well above the US$65 assumption in Budget 2026.
The 800-litre quota for e-hailing and gig workers will remain unchanged, Anwar affirmed, as the government took into account their occupational requirements.
He assured that the revision of the standard quota for individuals will not impact the majority of Malaysians. Citing government data, he said the average individual consumption under Budi95 is about 100 litres per month, with nearly 90% of users consuming less than 200 litres per month.
Anwar said the move is a necessary fiscal measure "to safeguard the broader public interest”, as the country waits for the stabilisation in global energy prices, which are not showing any signs of improvement at this juncture.
Part of the government’s targeted subsidy framework, the Budi95 programme allows eligible Malaysians to purchase RON95 petrol at a subsidised rate of RM1.99 per litre. This is currently capped at 300 litres per month for the standard individual user, with any consumption beyond that charged at the market-determined floating price.
Surging global oil prices have caused steep increases in the retail price of unsubsidised fuel, with RON95 surging RM1.20 or nearly 45% to RM3.87 per litre since March 11, from RM2.67 previously. At the same time, unsubsidised RON97 has jumped by RM1.90 or nearly 59% to RM5.15 per litre from RM3.25, while the pump price for diesel in Peninsular Malaysia has been hiked RM2.40 or nearly 77% to RM5.52 per litre, from RM3.12.
The goverment has kept the subsidised RON95 unchanged at RM1.99 over the same period, while maintaining diesel prices in Sabah, Sarawak and Labuan at RM2.15 per litre. But the cost of doing so has caused its monthly fuel subsidy bill to jump nearly six times to RM4 billion from RM700 million previously.
During his telecast, Anwar also warned of stricter enforcement actions against fuel smuggling, noting that leakages have cost the government hundreds of millions of ringgit per month.
WATCH: Subsidised RON95 monthly quota cut to 200 litres
Malaysian tanker granted passage in Strait of Hormuz
Meanwhile, the prime minister revealed that a Malaysian oil tanker and its crew have successfully passed through the Strait of Hormuz, which has been closed since the US-Israel attacks on Iran in late February, following diplomatic talks with Tehran.
“I would like to take this opportunity to thank the president of Iran for giving early clearance. We are now in the process of ensuring that the Malaysian oil tanker and its crew can continue their journey home,” he said.
Anwar also said he has been in active discussions with several world leaders to broker peace in the Middle East, including the presidents of Iran, Egypt and Türkiye, the prime minister of Pakistan, and various Gulf state leaders.
Progress has been difficult, he said, as Iran feels it has been repeatedly deceived and is reluctant to take steps towards peace without binding agreements and security guarantees for the country.