Budi95: Does the MADANI Government’s Fuel Plan Make Economic Sense?

Budi95 is a targeted subsidy scheme by the Malaysian government to give RON95 petrol at a reduced price to eligible Malaysian citizens, while phasing out blanket subsidy models that cover everyone including non-citizens and some businesses. However, this plan appears somewhat contradictory to what has been discussed and announced for months, which is a system where fuel prices would be floated based on the market rates and subsidies would be given out based on income levels. So, does this new plan make sense economically and politically? In this episode, we speak to Dr Lee Hwok-Aun, Senior Fellow, Malaysia Studies Programme and Regional Economic Studies Programme, ISEAS-Yusof Ishak Institute. We discuss how much the government can actually save with this new plan, consumer impact and the political will required to carry out important reforms such as fuel subsidy rationalisation.Image Credit: ShutterstockSee omnystudio.com/listener for privacy information.