The government is examining the possibility of reducing the monthly RON95 petrol consumption quota under the BUDI95 programme to 150 litres per month as a measure to ensure the security of domestic fuel supply in the global uncertainty following the West Asian conflict.
Although no official timeline has been announced, the implementation of the quota reduction is seen as potentially possible given that the BUDI95 programme now has a more detailed consumption data system.
This capability allows the government to make subsidy adjustments and manage fuel supplies more flexibly according to current conditions.
Deputy Finance Minister Liew Chin Tong said that current data shows that the majority of Malaysians use petrol far less than the existing quota of 200 litres per month, which was previously reduced from 300 litres.
According to him, about 80 per cent of Malaysians use less than 200 litres of petrol per month, while around 60 per cent of the population uses less than 150 litres per month.
In addition, almost half of Malaysians are recorded to use less than 100 litres per month.
He explained that efforts to reduce fuel consumption are considered important to ensure that supplies can be distributed more consistently to the people, especially as the global energy market continues to face the risk of supply disruptions due to geopolitical tensions.
At the same time, the government is also paying attention to the low-income group and motorcycle users who are considered to be the most affected in the event of a sudden increase in fuel prices.
Motorcycle users, for example, are estimated to only use around 50 litres of petrol per month and still require a high level of subsidy to reduce the pressure on the cost of living.
This approach is also seen as important in ensuring the country's social and economic stability, especially as the people are still facing the challenges of the cost of living and global economic uncertainty.
The government's fuel subsidy expenditure has reportedly increased almost 10-fold following the surge in crude oil prices due to the increase in geopolitical conflicts in West Asia since late February.
In another development, the government is also planning a targeted diesel subsidy mechanism for Sabah and Sarawak which is expected to use an approach almost similar to the BUDI95 program.
At the same time, the government stressed that the country needs to accelerate investment in public transport, electrification and denser urban development to reduce long-term dependence on fossil fuels.
The BUDI95 program is also seen as not just a targeted subsidy mechanism, but rather an important tool to manage demand and ensure that the country's fuel supply remains adequate if global geopolitical tensions continue.
