“(The existing) blanket subsidy is neither efficient nor fiscally viable,” said Consumer Choice Center Malaysia associate Tarmizi Anuwar.
Tarmizi said the existing scheme was not exclusive to Malaysians, and that foreigners driving Malaysian-registered cars were also entitled to purchase RON95 fuel at a heavily discounted rate.
“In reality, the market price of RON95 should be closer to RM2.60 per litre,” he said.
Beginning Sept 30, Malaysians aged 16 and above, and with a valid driving licence, will pay only RM1.99 per litre for RON95 fuel, but with a quota of 300 litres per month. The quota is reset every month.
As a result, they will enjoy an exclusive savings of 61 sen per litre of RON95 fuel, resulting in an estimated savings of up to RM183 per month on the market price.
Tarmizi said that because Malaysians have long enjoyed subsidised fuel, the savings will appear in real terms to be a modest six sen per litre. Nonetheless, it will leave households with more disposable income, especially those with higher fuel usage, he said.
“A two-person household consuming 600 litres could save RM36 a month, while a four-person household using 1,200 litres could save RM72,” he told FMT.
While the amount may not be transformative, Tarmizi said it is bound to ease financial pressure on families and individuals, freeing up some money for essentials like food, utilities and school needs.
Universiti Malaya’s Goh Lim Thye estimates that for the average commuter, the savings would more likely be between RM6 to RM10, depending on usage.
He said higher mileage users, such as e-hailing drivers and families with multiple vehicles, stand to benefit more.
Goh pointed to Malaysia’s low inflation rate of 1.3% in August. He said the indirect relief from cheaper fuel is likely to outweigh the direct savings felt at the pump.
Putra Business School’s Ida Yasin said the impact of cheaper fuel depends largely on how much households use.
She said the reduction would matter most to those who travel long distances daily for work.
“For people who don’t use much fuel, the impact may not be very noticeable. But for heavy users, even a small drop in price makes a big difference,” Ida said. She added that it would allow Malaysians more money to spend.
For further enquiries, the public may contact the Budi Madani hotline at 1300-88-9595.