KUCHING: Capping RON95 at RM1.99 per litre under BUDI95 will bring welcome savings for households, yet the 300-litre quota and rising oil prices could expose gaps between urban and rural families, said Afiza Abu Bakar.
The Universiti Malaysia Sarawak (UNIMAS) Faculty of Economics and Business senior lecturer said that the scheme, set to begin on September 30, fixes RON95 slightly below the current subsidised price of RM2.05 and well under the market rate of about RM2.60.
She noted that a household using 200 litres a month could save around RM12 compared with the old price and more than RM120 against the market rate.
“Even if the impact on overall inflation is modest, the relief is real and welcomed by households managing tight budgets,” she told Sarawak Tribune.
She added that cheaper fuel also helps slow cost increases in transport and food.
She pointed out that in past years, when petrol rose by 20 sen per litre, the price of meals and groceries went up within weeks as delivery costs climbed.
“By keeping RON95 at RM1.99, BUDI95 can help stabilise transportation expenses and slow down such pass-through effects,” she said.
The 300-litre monthly cap is designed to balance household relief with fiscal control, but Afiza noted that it is more suitable for city drivers than rural motorists.
“A farmer or teacher in the interior who drives more than 100 kilometres a day could easily exceed 300 litres, forcing them to pay the higher RM2.60 per litre for the rest of the month,” she said.
She said the government has already shown flexibility by granting exemptions to e-hailing drivers and should apply the same fairness to rural households.
“Policies that recognise the different realities faced by the rakyat will be more inclusive and better received,” she said.
BUDI95 also introduces, for the first time, a distinction between citizens and non-citizens in access to subsidised fuel.
She said past blanket subsidies were open to abuse by foreign-registered vehicles and non-citizens, with some studies estimating leakages of more than RM4 billion each year.
“By ensuring that only Malaysians with MyKad and a driving licence can access the lower price, the government is plugging a leak that has long frustrated the rakyat,” she said.
She added that the resale of unused quotas could emerge if the system is not closely enforced.
“Such black-market practices may not appear immediately, but they could grow over time if the system is not carefully managed,” she said, urging strict monitoring, digital tracking and awareness campaigns to prevent profiteering.
Afiza said that adjustments will be needed as the scheme rolls out.
“The government should be given a grace period of a few months to manoeuvre the effects of this new subsidy system and to refine its mechanism,” she said, stressing that proper channels must be in place to ensure no group is left behind.
She stressed that fiscal risks also remain.
“A sudden 20 per cent hike in crude oil prices could push subsidy costs higher by billions of ringgit in a single year,” she said, warning that the government will need to balance affordable fuel with sustainable public finances.
Afiza said BUDI95 is an important step towards more targeted subsidies, but it must form part of a broader strategy.
“Investments must be made in reliable public transport, energy efficiency programmes and alternative energy sources.
“If the rakyat has affordable options beyond private cars and petrol, the transition away from subsidies will be smoother and more acceptable.”
