The government should retain the Budi Madani RON95 (Budi95) fuel subsidy for all Malaysians and instead require banks to play a bigger role in supporting micro, small and medium enterprises (MSMEs), DAP Bagan MP Lim Guan Eng has said.
In a statement, Lim said Prime Minister Datuk Seri Anwar Ibrahim could avoid “accusations of double standards” by focusing reforms on the banking sector rather than restricting fuel subsidies to lower-income groups.
He was responding to discussions on proposals to limit the Budi95 subsidy to lower-income households, a move currently being considered by the government.
Lim warned that narrowing the subsidy coverage could be perceived as unfair and may erode public trust, arguing that fiscal reform should not appear punitive in nature.
He also said the proposal fails to reflect the financial realities of many urban households in the T20 income group, noting that higher earners are also affected by rising living costs, housing commitments and childcare expenses.
“For that reason, the BUDI95 fuel subsidy scheme must be maintained and made available to all Malaysians,” he said.
Instead of reducing fuel subsidies, Lim proposed that banks contribute more directly to MSME financing, including RM5 billion in interest-free and collateral-free loans ranging from RM50,000 to RM100,000.
He also suggested a one-year moratorium on existing MSME loan repayments to ease cash flow pressures on businesses.
Lim noted that Malaysia’s banking sector continues to report strong profits, citing a 13.5 per cent increase in profit before tax to RM54.8 billion in 2025, up from RM48.3 billion in 2024.
He questioned why the financial sector should not be asked to contribute more, given what he described as robust earnings and a relatively low interest rate environment.
Citing industry data, Lim said a significant proportion of manufacturers are currently facing cash flow difficulties, with many struggling to meet supplier payments.
He added that MSMEs remain under severe financial strain and urged both the government and banks to share responsibility in easing business pressures through targeted financial support measures.
