The Malaysian government is expected to save at least RM2.5 billion this year as a result of the implementation of the restructuring of the RON95 petrol subsidy and will be a major step in efforts to strengthen the country's financial position.
Prime Minister Datuk Seri Anwar Ibrahim said that the Budi95 targeted subsidy scheme, which was introduced since the end of September, has shown smooth and effective implementation.
According to him, around 90% of consumers use less than 200 litres of subsidised petrol per month, proving that the majority of the people are still within the reasonable consumption range.
The system also recorded approximately 3.1 million transactions per day, equivalent to almost 96 million transactions per month, a figure that reflects the smooth operation at the implementation stage.
Previously, petrol subsidies were given comprehensively regardless of income. However, this approach was seen as burdening the country's finances and prone to leakage.
Through Budi95, only the people who are eligible to enjoy the subsidised price of RM1.99 per litre for up to 300 litres per month, while those who are not eligible have to pay the market price.
The savings measures are being used to re-distribute to ease the cost of living of the people, especially the B40 and M40.
More importantly, the savings from this subsidy reform will not just disappear.
The government has stressed that the funds will be channeled back to the people through welfare and development programs.
Among them is the Basic Rahmah Contribution (SARA), where all eligible recipients will receive RM100 via MyKad starting February 9.
In the first two days alone, almost RM200 million has been spent by two million recipients and this is a clear indication that the aid continues to have an impact on the people's economy.
According to Anwar, this subsidy restructuring is important to address the country's long-term fiscal challenges.
Bulk subsidies that are increasing every year are no longer sustainable and require a more targeted and responsible approach.
With savings of RM2.5 billion and implementation that has been going smoothly so far, this measure is seen as an effort to balance the country's financial discipline and the people's welfare.
