The government will maintain its targeted subsidy system for RON95 petrol under the Budi Madani RON95 (Budi95) programme, rejecting the World Bank’s proposal to raise fuel prices to market rates, Prime Minister Datuk Seri Anwar Ibrahim said today.
Tabling the Supply Bill 2026 in the Dewan Negara, Anwar said the World Bank had suggested increasing all petrol prices to RM2.65 per litre and then channelling subsidies only to selected groups.
However, the government opted to keep RON95 at RM1.99 per litre for Malaysians and RM2.60 per litre for foreigners.
He said the targeted RON95 subsidy has effectively cut government spending without burdening the rakyat, while ensuring subsidies reach the intended groups and curbing leakages to non-citizens and businesses.
Anwar also pointed out that ending subsidies for chicken and eggs and allowing prices to float did not disrupt supply or cause instability.
The Madani government expects to save RM15.5 billion annually through targeted subsidies for chicken, eggs, electricity, diesel and RON95.
He stressed that Budget 2026 introduces no new taxes, with savings instead achieved through better governance, improved tax compliance and the targeted subsidy framework.
“If the federal government can increase allocations without imposing new taxes, I urge state governments to do the same and ensure any new measures do not burden the people,” he said.
