Malaysians will be able to buy even cheaper petrol – but only up to 300 litres (79 gallons) per month – from next Tuesday under a sweeping new fuel subsidy scheme announced on Monday, aimed at reducing the country’s bloated subsidy expenditure.
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Fuel subsidies have long strained the budget, with nearly 20 billion ringgit (US$4.7 billion) spent annually in recent years – about 8 per cent of total expenditure.
Under the old system, all motorists enjoyed unlimited RON95 petrol at 2.05 ringgit (49 US cents) per litre. The new scheme announced by Prime Minister Anwar Ibrahim on Monday now limits the subsidy to only Malaysians.
The country’s citizens will enjoy even cheaper petrol at just 1.99 ringgit per litre, while foreigners will have to pay a floating rate of around 2.60 ringgit per litre for the same fuel.
“All citizens, regardless of income level, who have an active driving license will automatically be eligible to enjoy the benefits of BUDI95. This is a privilege only for Malaysians,” said Anwar, referring to the name of the scheme.
“Some may criticise, why will the ultra-wealthy also get it? This is recognition for the people of Malaysia.”
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He added that the savings would be redistributed as cash handouts and other forms of help to the public, as well as used to fund the country’s health and education programmes and basic infrastructure.