The new fuel pricing mechanism for the Budi95 targeted petrol subsidy has only been in place for a fortnight - since 30 September 2025.  It is somewhat premature to already claim that this will lead to savings of RM8 billion annually for the government.

Such a significant projection ought to be supported by clear and reliable data with evidence. Given the short period since implementation, MCA Youth is not convinced by the claimed figures on fuel consumption and financial impact.

It would be helpful if Perak Housing and Local Government Committee Chairman YB Puan Sandrea Ng Shy Ching, who is also the Wanita PKR national executive committee member, and Perak PKR communications director, could clarify how this estimate of RM8 billion in savings was calculated. For instance, does it account for the additional revenue resulting from the adjustment in non-citizen fuel prices? Or perhaps anticipated savings from efforts to curb fuel smuggling? These are reasonable questions that we feel deserves to be answered.

If the government intends to use these projected savings as a basis for the policy’s legitimacy, we would like to see greater transparency on how they arrived at this figure. It would be reassuring to see detailed information made available, such as:

1. A comparison of fuel sales before and after the new mechanism was introduced,

2. The additional income generated from the revised non-citizen fuel rates,

3. Documented outcomes and savings from measures tackling fuel smuggling,

4. And the methodology or model used to project annual savings.

If these figures are based mainly on theoretical models or early assumptions, it may be more appropriate to present them as preliminary estimates rather than as established outcomes. Sound financial planning should be grounded in actual data, especially when discussing public funds.

It is true that the government has reduced its subsidy expenditure and gained additional revenue following the adjustment in RON95 prices. While this does improve the fiscal position, it would be reasonable to consider how these gains might directly benefit the public - whether through further price reductions or the introduction of a price stabilisation mechanism to ease the impact of higher fuel costs.

After all, as an oil-producing nation, Malaysia’s fuel subsidies should be designed with people’s well-being in mind, not treated merely as a fiscal exercise. If substantial savings are indeed being realised, it seems only fair that the public should see tangible benefits, such as lower fuel prices or greater price stability, rather than simply being presented with figures that are difficult to verify.

Therefore, we urge the Ministry of Finance and the Ministry of Domestic Trade and Cost of Living to share the financial assumptions, forecasting models, and any interim results related to the new mechanism. This would help provide a clearer and more honest understanding of the policy’s real effects, ensuring public trust is maintained through openness and factual dialogue.

Jacob Lee Yee Yuan
MCA Youth Vice Chairman

13 October 2025

-MCA Comm-