The Malaysian government is reviewing the distribution of RON95 (BUDI95) petrol subsidy quotas from 300 litres to 200 litres a month, according to a report by The Edge. The move is expected to be announced as early as this week and is likely to be implemented as early as April.
The main reason for the quota review is the surge in global oil prices caused by the Middle East crisis. If crude oil prices continue to exceed $110 per barrel, the government will have to bear subsidy costs of up to RM24 billion. This quota reduction is a proactive measure to control national spending in the short term.
Speaking in the Dewan Rakyat last month, Prime Minister Anwar Ibrahim said the average consumption of Budi95 has been around 100 litres a month since it was implemented in September, with 90% of consumers not using more than 200 litres a month.
