December 6, 2025 | 05:45 pm
TEMPO.CO, Jakarta - Malaysia’s government has reaffirmed its commitment to targeted subsidies for RON95 gasoline under the RON95 Civic Virtue Program, known locally as Budi95.
Prime Minister Anwar Ibrahim reiterated his rejection of the World Bank’s recommendation to raise fuel prices to market levels.
Anwar said the targeted RON95 subsidy has been an effective measure to reduce government spending without putting additional financial strain on citizens.
“The (World Bank’s) proposal is to increase the price to RM2.65 per litre for all petrol, and then provide subsidies for certain categories.,” Anwar said while presenting the Petroleum Supply Bill 2026 at the National Assembly this week, as reported by Malay Mail.
“Therefore, my fellow Cabinet members and I rejected the proposal and lowered the RON95 price to RM1.99 per litre for Malaysian citizens and RM2.60 per litre for foreigners.”
He emphasized that this approach is prudent, benefits the population, and has been widely welcomed.
“This shows that our (the government’s) approach is prudent and we take actions that can benefit the people. Alhamdulillah, the targeted RON95 subsidy throughout Malaysia has received very good and positive response,” he said.
As Finance Minister as well, Anwar highlighted that targeted subsidies ensure assistance reaches the majority of citizens while preventing benefits from being used by foreign nationals and commercial enterprises.
“When the government ended subsidies for chicken and eggs and floated their prices, the government ensured prices remained stable, supply was sufficient, and the people were not affected,” he added.
The Civic Government aims to achieve annual savings of around RM15.5 billion through targeted measures, including stabilizing prices for essential goods such as chicken and eggs, as well as subsidies for electricity, solar energy, and RON95 gasoline.
Anwar also noted that the 2026 Budget avoids introducing new taxes, relying instead on improved governance, targeted subsidies, and stronger tax compliance.
“Normally, when additional spending is announced, the government would impose new taxes, but this is a situation where Malaysia can increase allocations significantly without introducing new taxes, and this is due to targeted subsidies and several other measures such as savings and preventing leakages” he said.
He urged state governments to adopt similar practices, warning that new policies or taxes should not impose additional burdens on the people.
Read: Prabowo Hails Indonesia's Palm Oil After Sumatra Floods Kill Hundreds
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