Budi95 Fuel Subsidy Programme Rolls Out with MyKad Verification

The Malaysian government is set to launch its Budi Madani RON95 programme (Budi95) this Saturday, September 27, 2025, ushering in a new era of targeted fuel subsidies.

Under the initiative, MyKad readers will be installed at all petrol stations and pump terminals, allowing eligible recipients to access RON95 petrol at a subsidised price of RM1.99 per litre simply by tapping their MyKad.

This change represents a significant shift in Malaysia’s subsidy system — moving away from blanket subsidies toward a targeted, identity-based approach designed to protect vulnerable groups while ensuring fiscal sustainability.

How Budi95 Works

According to the Ministry of Finance (MOF), MyKad will serve as the primary verification tool:

No pre-registration required — eligibility is tied directly to MyKad and driving licence status.
Tap to verify — users authenticate at the pump terminal using the embedded chip in their MyKad.
Alternative options — payments can also be verified via Touch ’n Go eWallet, Setel by Petronas, or CaltexGo apps.

This approach aims to minimise congestion at fuel stations, streamline user experience, and curb abuse of subsidies.

Rollout Timeline

The government is phasing the programme to prevent disruptions:

Sept 27, 2025 – First access for armed forces and police personnel (≈300,000 individuals).
Sept 28, 2025 – Expansion to Sumbangan Tunai Rahmah (STR) recipients from the B40 group.
Sept 30, 2025 – Nationwide rollout for all Malaysians aged 16 and above with a valid MyKad and active driving licence (≈16 million people).

This staggered launch ensures the system stabilises before full-scale adoption.

Eligibility & Conditions

To benefit from Budi95, citizens must:

Hold a valid MyKad with a functioning chip.
Possess an active driving licence.
Not fall into excluded groups (such as certain aid recipients under Sumbangan Asas Rahmah (Sara) or Penghargaan Sara — already considered covered).

The government has clarified that those receiving Sara benefits do not need to renew their MyKad immediately, as their chip status is deemed active.

Why Subsidy Reform Matters

For decades, Malaysia’s blanket fuel subsidy system has kept pump prices artificially low for all consumers, regardless of income. While popular, it has placed heavy strain on government finances and encouraged fuel smuggling.

The new targeted approach under Budi95 aims to:

Protect vulnerable groups (B40 and selected M40).
Reduce fiscal leakage by cutting subsidies for higher-income households and foreign users.
Encourage more efficient fuel consumption in line with Malaysia’s sustainability goals.
Free up government funds for development projects, infrastructure, healthcare, and housing.

Prime Minister Datuk Seri Anwar Ibrahim has emphasised that Budi95 is part of broader reforms to balance social welfare with long-term economic stability.

RON95 Pricing Under Budi95

Standard RON95 Price: RM2.05 per litre.
Budi95 Subsidised Price: RM1.99 per litre.

Though the difference may appear modest at first glance, it reflects a major policy shift: subsidies will no longer be universally enjoyed, but instead tied directly to eligible Malaysians via identity verification.

Over time, the model could pave the way for broader means-tested subsidies across electricity, healthcare, or public transport.

Impact on Daily Life

1. Everyday Commuters

For millions of Malaysians driving cars or motorcycles, the MyKad tap system ensures quick access to savings without complicated registration.

2. Rural & B40 Communities

Lower fuel costs ease household spending pressures, particularly for rural families where transport expenses form a large part of monthly budgets.

3. Urban Professionals

Although some middle- and high-income groups may no longer enjoy blanket subsidies, the impact is offset by Malaysia’s relatively lower pump prices compared to regional peers.

4. Businesses

Logistics, delivery services, and SMEs relying on transport may see changes in cost structures depending on fleet eligibility and employee status under Budi95.

Broader Economic Implications

Reducing Fiscal Burden

Malaysia spends billions annually on blanket subsidies. By narrowing the pool of recipients, Budi95 is expected to save government expenditure, redirecting funds to development priorities such as housing, education, and public transit infrastructure.

Strengthening Targeted Aid

Budi95 complements cash transfer programmes like STR and Sara, ensuring subsidies reach those who need them most while avoiding duplication.

Technology & Governance

The integration of MyKad, eWallets, and mobile apps demonstrates Malaysia’s shift toward digital governance and cashless subsidy distribution, paving the way for smarter welfare systems.

What It Means for Property and Urban Living

While Budi95 is primarily a fuel subsidy reform, its ripple effects will reach the property market and urban dynamics:

Improved Fiscal Stability = More Development Budget
Savings from fuel subsidies can be channelled into infrastructure, housing, and urban regeneration projects — directly benefiting property markets in Kuala Lumpur and beyond.
Urban Commuting Costs Stabilised
By cushioning fuel costs for lower-income groups, Budi95 helps sustain demand for affordable housing near transport hubs, as commuting remains manageable.
Investor Confidence
Targeted subsidies show Malaysia is serious about fiscal reform and sustainable growth, boosting investor sentiment in sectors such as real estate and infrastructure.
Sustainability Transition
As subsidy models evolve, Malaysia may gradually incentivise electric vehicles (EVs) and alternative energy, shaping future residential and commercial property features such as EV-ready infrastructure.

Challenges Ahead

Despite its promise, Budi95 faces challenges:

System Readiness: Ensuring all petrol stations nationwide have functioning MyKad readers.
Public Awareness: Educating Malaysians on eligibility, requirements, and procedures.
Technical Glitches: Preventing congestion and errors at pumps during rollout.
Equity Concerns: Addressing grey areas for M40 households not fully covered by subsidies.

The government has pledged to monitor implementation closely and adjust policies as needed.

Conclusion

The launch of Budi95 on September 27, 2025 marks a historic milestone in Malaysia’s subsidy reform journey. By tying RON95 fuel subsidies to MyKad verification, the government is making a bold move toward targeted aid, fiscal sustainability, and digital governance.

For everyday Malaysians, it simplifies access to cheaper fuel. For the economy, it curbs waste and repositions resources for long-term development. And for the property sector, it signals a government intent on balancing short-term relief with structural investment in housing, infrastructure, and sustainable growth.

As Malaysia navigates this transition, KL property investors should pay close attention: policies like Budi95 are not just about fuel—they are part of a broader strategy shaping urban living, mobility, and economic competitiveness in the years ahead.