Fill up at almost any petrol station in Malaysia, tap your MyKad, and the pump reads RM1.99 a litre. It has read that since Sept 30 last year and has not moved once since. What changed in April was not the price. It was how much cheap petrol each driver can buy, down from 300 litres a month to 200. The argument that followed was about whether 200 litres is enough to get to work. Petrol is cheap because the government pays part of it. Fewer cheap litres mean the government pays less. That is what the cut really was.
That leaves one question. Why cut the limit to 200 litres instead of raising the price?
Petrol costs RM3.62. You pay RM1.99
You see one price. The other one is the real cost. RM3.62 is the market price for RON95, set weekly like any other fuel. That was the price in the week of Aug 13. Budi95 does not change it. It only decides who pays RM1.99 instead. You pay RM1.99. The government pays the other RM1.63. That is the finance ministry’s own figure. The government pays almost as much as you do.
The bill nobody sees
Part of the answer is that the cost stays hidden. A driver sees RM1.99 at the pump. What they do not see is what pays for it, because that sits in the government accounts, not on the display. And it is a large bill. Before oil prices spiked it ran at about RM800 million a month, the finance ministry said. At the peak this spring it reached around RM5 billion a month, enough on its own to swallow almost the entire RM49 billion set aside this year for every subsidy and aid programme. That is the trap. A price you can see is easy to keep. A cost you cannot see is easy to put off.
So, the government has two ways to spend less. Raise RM1.99, or hand out fewer cheap litres. Raising RM1.99 would hit 14 million people on the same day. That is everyone who taps a MyKad at the pump, out of 16.5 million who qualify. And they would see it, because the price is a number they read every time they fill up.
Cutting the limit is quieter. Nobody pays more on the day it starts. The complaints come at the end of the month, from the drivers who ran out, a few at a time.
Budi95 does not set the price of petrol. It picks who pays RM1.99. When oil prices rise, that is how the government spends less.
April: 300 litres becomes 200
Iran closed the Strait of Hormuz in February. The price of oil went past US$100 a barrel and kept climbing. The market price of petrol rose with it. RM1.99 did not, so the government’s share of every litre grew instead.
Petrol and diesel subsidies had cost about RM700 million in January. By March the bill was RM5 billion a month. In April it reached RM7.5 billion. That is half of what the 2026 budget set aside for fuel subsidies for the whole year.
Anwar Ibrahim announced the cut in a live broadcast on March 26. It started on April 1. He said it was temporary.
July: diesel joins the 200 litres
By June the worst had passed. Oil prices came down and the subsidy bill fell to about RM4 billion a month. The limit stayed at 200 litres. The cut was supposed to be temporary.
In July the government added diesel to that same limit. Subsidised diesel now costs RM2.10 a litre across the country. You buy it with a MyKad, just like Budi95. About 750,000 diesel vehicle owners can use it. Most of them are better off. Diesel drivers in the peninsula used to pay the full market price.
Your petrol and your diesel now come out of the same 200 litres. Second finance minister Amir Hamzah Azizan said this gives drivers flexibility, because they can now use their 200 litres on either fuel.
That is true. It also means a family with one petrol car and one diesel vehicle now splits 200 litres between them. Before July, the petrol car had all of it.
The petrol price did not move.
April: 300 litres becomes 200
Maybe this changes nothing for most people.
Amir Hamzah said as much himself. On June 9 he said the 200-litre limit would only be looked at again if oil hit US$200 a barrel. It was around US$92 that day. That does not sound like a government planning more cuts.
Thirteen days later, he said the same 200 litres would cover diesel too.
Even so, hardly anyone runs out. Between January and May, only 0.76% of Budi95 users went over 200 litres in a month. That is fewer than one in a hundred.
The cuts are also not saving much. The government has never said how much the April cut saved. It said the diesel change will save about RM2 billion a year. The whole fuel subsidy bill is heading for RM40 billion. It has not shown how it reached the RM2 billion. What brought the bill down from RM7.5 billion was the oil price falling.
None of this says the government hid anything. Every change was announced.
The point is smaller. The government now has a way to spend less on fuel without changing the price. It has used it twice in four months.
RM1.99 is still there. It has not changed in more than 10 months. But it no longer tells you much. The price used to move when the subsidy changed. Now the subsidy changes and the price stays put.
Neither change showed up at the pump.
So, the price is not the thing to watch any more. The number that matters is on your receipt: how much of your 200 litres is left.
