Without Budi95, T20 enjoys more benefits than B40 – Rafizi

SHAH ALAM – Without the implementation of targeted RON95 petrol subsidies, high-income earners (T20) would continue to receive greater benefits compared to lower-income Malaysians (B40).

Former Economy Minister Datuk Seri Rafizi Ramli said this is because every time the government spends on subsidies, wealthier families end up receiving a larger share than B40 households.

“If RON95 subsidy targeting is not implemented, for every RM1 of RON95 subsidy spent by the government, T20 households will receive 75 per cent more than B40 households.

“The country will also remain exposed to the volatility of global crude oil prices,” he said in a Facebook video post on Monday.

Yesterday, Prime Minister Datuk Seri Anwar Ibrahim announced that the price of RON95 petrol will be reduced from RM2.05 to RM1.99 per litre starting Sept 30 under the Budi Madani RON95 (Budi95) programme.

He said the scheme applies only to Malaysian citizens, while non-citizens will have to pay RM2.60 per litre after that date.

Rafizi stressed that subsidy targeting is the right step to ensure government assistance reaches the intended groups.

Rafizi

“My position has always been consistent that retargeting subsidies is good for the country as it corrects policy direction, shifting government benefits from the wealthier groups who previously enjoyed more, to those in greater need,” he said.

The Pandan MP noted that Malaysia’s RON95 petrol consumption is estimated at 1.3 to 1.5 billion litres per month, forcing the government to bear a significant annual subsidy bill.

“Without subsidy retargeting, the estimated annual RON95 subsidy would be around RM10 to RM12 billion, compared to spending in 2023 and 2024 which exceeded RM20 billion per year when global crude oil prices rose above USD80 per barrel,” he explained.

He added that the majority of economists would also agree that retargeting RON95 subsidies is a necessary step in Malaysia’s economic reform agenda.