If 90% Never Hit the Quota, What Exactly Did Cutting It Save?

From 1 September, the BUDI95 RON95 quota goes back up to 300 litres a month, and the Budi Madani Diesel allocation rises to 400 litres.

Good. But let’s not move on too quickly, because the reasoning that got us here still does not add up — and the same reasoning can be used again the next time oil prices twitch.

Start With the Government’s Own Numbers

The Finance Ministry has said, repeatedly, that nearly 90% of drivers use less than 200 litres a month, that the average is around 100 litres, and that the majority of B40 and M40 households are therefore unaffected. In May, the Deputy Finance Minister went further while floating a 150-litre cap: 60% of Malaysians, he said, use less than 150 litres.

Take those numbers at face value for a moment. Assume they are completely accurate.

Then the entire policy collapses under its own logic.

Unused Quota Costs Nothing

This is the part nobody at the ministry has explained.

The subsidy is paid on litres actually pumped. Not on litres allocated. If my quota is 300 litres and I use 100, the government pays for 100. If my quota were 500 litres and I still used 100, the government would still pay for 100.

Unused quota costs the treasury exactly zero.

So when the cap was cut from 300 to 200 litres in April, it changed nothing for the 90% who never reached 200 in the first place. The only people it touched were the ones already above it.

Which leaves the ministry with two answers, and both of them are bad:

Either the data is right — 90% never come close to the cap — in which case cutting it saved almost nothing, and the whole exercise inflicted real hardship on a minority for a rounding error.

Or cutting it did save serious money — in which case far more than 10% of Malaysians were exceeding 200 litres, and the statistic we were given was wrong.

Pick one. There is no third option.

The Rough Arithmetic

The ministry itself put RON95 and Budi Diesel subsidies at around RM4 billion a month.

Cutting the cap from 300 to 200 litres only affects drivers who were using between those two figures. Using the government’s own framing — roughly 10% of drivers, losing an average of perhaps 30 to 50 subsidised litres each:

1.6 million drivers × 40 litres × roughly RM0.60–1.00 of subsidy per litre ≈ RM40–64 million a month.

Against a RM4 billion monthly subsidy bill, that is somewhere around 1%.

One percent. That was the saving. The cost was six months of anxiety for well over a million people whose vehicles are how they earn a living.

These are estimates built on the ministry’s own published figures, and the assumptions are all visible above. If they are wrong, the ministry is welcome to publish the real ones. Which brings us to the next problem.

Nobody Has Shown Their Working

We have been given a headline statistic and asked to accept it. What we have never been shown is the methodology.

Does “drivers” include the roughly 16 million motorcycles on our roads, which burn maybe 20 litres a month? If so, the average is dragged down by half and tells us nothing useful about people who drive cars to work.

Is the unit a person, a household, or a vehicle? The quota is tied to MyKad. A household with two licensed adults and two cars holds two quotas — and appears in the data as two light users.

And here is the trap the ministry has built for itself: once you impose a 200-litre cap, no one in the system can ever record more than 200 litres. Someone who genuinely needs 250 shows up as exactly 200, then buys the rest at unsubsidised prices where the data cannot see it, or borrows a family member’s quota, where it is credited to somebody else. Next year’s figures will duly “prove” that almost nobody exceeds 200 litres.

The cap manufactures the evidence for the cap.

Fuel Is Not a Luxury Indicator

The claim that B40 households are unaffected deserves the hardest scrutiny of all, because it inverts how transport poverty actually works in this country.

People live far from work because they cannot afford to live near it. The cheaper the housing, the longer the drive. Distance is a symptom of low income, not high income.

Older cars burn more fuel. A fifteen-year-old Wira manages perhaps 9 to 11 km per litre. A new Axia does close to 20. The same journey costs a poorer family nearly twice as much fuel. A per-litre subsidy cap therefore falls hardest on whoever is driving the oldest car.

For many, the car is a tool, not a comfort. Aircond technicians, plumbers, electricians, contractors, insurance agents, night market traders, factory workers on shifts that no bus serves. Cut their fuel and you have not cancelled a holiday. You have cancelled jobs.

And then there is East Malaysia. Sabah’s poverty rate is 17.7%, more than three times the national 5.1%. Median household income there is RM4,577; in Kelantan it is RM3,614. These are precisely the places with the longest distances, the poorest roads and the least public transport. The states least able to absorb a fuel squeeze are the ones with no alternative to driving.

Meanwhile a coalition of media practitioners spent April telling anyone who would listen that 200 litres did not cover the job.

What Actually Needs Answering

Restoring the quota to 300 litres is welcome. But going from 300 to 200 and back to 300 inside six months is not fine-tuning. It is an admission that the cut was never well grounded to begin with.

So, three questions, and they are not rhetorical:

1. Publish the methodology. What was counted, who was counted, and over what period?
2. If 90% never reach the cap, state plainly how much the cut actually saved.
3. Commit to a floor — a quota level that will not be revised downward every time the oil price moves — so that the people who drive for a living can plan more than one quarter ahead.

Targeted subsidy is a reasonable goal. Most of us accept that blanket subsidies leak, and that not every ringgit should flow to those who need it least.

But a policy this consequential has to be defended with numbers the public can actually inspect. Right now we have a headline percentage, no working, and more than a million people who were told their own experience was statistically insignificant.

They are not a rounding error. They drive for a living.