Lower-income Malaysians gain most from BUDI95 fuel subsidy scheme

The lower and middle-income households are the primary beneficiaries of the BUDI95 fuel subsidy initiative, contrary to widespread assumptions about fuel consumption patterns across income groups, a senior government official has stated.

Data compiled on fuel usage shows that the B40 and M40 segments—representing households in the bottom 40 per cent and middle 40 per cent income brackets respectively—derive greater advantage from the subsidy programme than the T20 top-income group. The findings challenge the conventional perception that wealthier Malaysians consume disproportionately more fuel and thus capture a larger share of subsidy benefits.

The analysis suggests that fuel consumption patterns may be influenced by factors beyond income levels, including vehicle usage patterns, commuting distances and household geographic location. The data has prompted a reassessment of how subsidies are distributed across income groups in Malaysia's social welfare framework.

The revelation comes as policymakers continue to evaluate the effectiveness and targeting mechanisms of subsidy programmes intended to support lower and middle-income Malaysians during periods of economic pressures.