• Malaysia reduces RON95 petrol price for citizens to RM1.99 per litre.
• Implementation effective from September 30, 2023, with a 300-litre monthly cap.
• Foreigners will pay RM2.60 per litre as part of subsidy reforms.
• Government plans to channel savings into public infrastructure and support programs.
• Criticism exists over maintaining subsidies for higher-income individuals.

Malaysia's Prime Minister Anwar Ibrahim announced a reduction in the price of RON95 petrol for citizens from RM2.05 to RM1.99 per litre, effective September 30, 2023. This decision is part of a broader initiative to adjust fuel subsidies while alleviating the cost of living for citizens. However, to control expenditures on subsidies, there will be a limit of 300 litres of subsidised petrol per month for eligible Malaysians, who must present a valid driver’s license at the pump, according to Channel News Asia.

Foreigners will face a significantly higher rate of RM2.60 per litre for RON95 fuel, a move intended to curb the misuse of subsidies by non-citizens and reduce the financial burden on the country's budget. Prime Minister Anwar emphasized the need for such measures to ensure that the benefits of subsidised fuel are reserved exclusively for Malaysian citizens, as reported by SCMP and Bangkok Post.

Under the new scheme, dubbed "BUDI95," Anwar argued that it remains beneficial for all citizens despite criticisms that wealthier individuals would still benefit from the subsidies. The expected annual savings from these adjustments are projected to fall between RM2.5 billion and RM4 billion, a significant reduction from previously anticipated savings of RM8 billion when a stricter subsidy framework was proposed. This is indicative of the government's balancing act between fiscal discipline and public acceptance due to rising living costs, as noted by Channel News Asia and Bangkok Post.

The implementation of the new pricing structure and controls is seen as a pragmatic approach to mitigate fiscal pressures while addressing public grievances about the cost of living. Additional measures, such as verification protocols for higher petrol allocations for ride-hailing drivers, will also be established to ensure that subsidies are not abused. Such considerations reflect the ongoing challenges faced by the Malaysian government in maintaining budget health while catering to citizen needs, according to Channel News Asia, SCMP, and Bangkok Post.