Malaysian Prime Minister Anwar Ibrahim on Sunday unveiled six measures to alleviate the cost of living and boost businesses, such as reopening a monthly supply of subsidized RON95 fuel at 300 litres and increasing small traders’ support.
The measures will take effect on Sept. 1, the minister for International Cooperation said during his speech on National Day at the Putrajaya International Convention Centre.
The package includes fuel subsidies, school maintenance, artificial intelligence, digitalization of health care, e-invoicing and micro financing. Anwar said the measures were intended to provide temporary relief to Malaysians facing pressure from the cost of living.
“The economic growth of the country must be returned to the people,” he said.
The announcement comes as Malaysia’s economy continues to expand. The Department of Statistics Malaysia said gross domestic product grew 6% year over year in the second quarter, up from 5.4% in the first quarter. The economy grew 5.7% in the first half of 2026 compared with 4.5% during the same period a year earlier.
Fuel Quotas Restored From Sept. 1
Anwar said the government would restore the basic monthly quota under the Budi MADANI RON95, or BUDI95, program to 300 liters from 200 liters.
The government lowered the quota from 300 liters to 200 liters from April 1, from the current price, after the war in West Asia helped to drive up oil prices. The subsidized RON95 price remains RM1.99 per liter.
The restored quota is expected to benefit more than 16 million users of subsidized RON95, Anwar said.
More than 500,000 eligible owners of diesel-powered pickup trucks and jeeps will be able to receive up to 400 liters of subsidized diesel a month, according to the prime minister.
The diesel allocation is part of the Budi MADANI Diesel system. The basic quota is being raised alongside the BUDI95 adjustment, while eligible pickup truck and jeep owners can receive an additional allocation under the program.
The government said registered BUDI95 users do not need to make a new application for the quota restoration, with the adjustment taking effect from Sept. 1.
Small-Business Support Expanded
Anwar also announced measures to ease the compliance costs and access for micro, small and medium-sized businesses for financing.
The prime minister has announced that the exemption for e-invoicing for eligible MSMEs has been increased from RM1 million to RM3 million.
Malaysia’s existing e-invoicing system is being implemented in stages. The Inland Revenue Board of Malaysia currently exempts taxpayers with annual sales or revenue below RM1 million, while businesses with revenue up to RM5 million entered the latest implementation phase from Jan. 1, 2026.
Anwar also announced a RM200 million Geran Sejahtera Madani grant pool to support small vendors, night-market traders and home-based businesses.
Additional microcredit financing will be channeled through government-backed institutions including TEKUN Nasional and Bank Simpanan Nasional to expand access to financing for micro-traders.
School Funding, Health Care and AI
The government will increase school maintenance funding by 50% to RM1.5 billion from RM1 billion for 2027, according to Anwar. The additional allocation will cover different types of schools nationwide.
The package also includes additional funding for digital health systems. Anwar said funds recovered from illegal financial activities and corruption would be directed toward public health care and education.
The government will also open an artificial intelligence program to Malaysians aged 18 to 30, with free access to selected applications, according to Anwar’s address.
The programs are part of the government’s overall six-point package, which was announced ahead of Malaysia’s National Day on Aug. 31. The measures will take effect from Sept. 1.
Cost-of-Living Pressure
The measures come despite relatively strong economic growth. Malaysia’s GDP expanded 6% in the second quarter, with services and manufacturing among the sectors supporting growth. Manufacturing expanded 7.3%, while services grew 5.9%, according to the Department of Statistics Malaysia.
The fuel quota decision follows an earlier reduction that was introduced as the government sought to manage the cost of targeted subsidies amid higher international oil prices.
Speaking at the Ministry of Domestic Trade and Cost of Living’s assembly in March, Anwar had reaffirmed the government’s position on subsidized RON95 prices, saying:
“Today, oil prices have risen by up to US$100 per barrel, yet we have maintained the RON95 price at RM1.99. We will continue to make every effort to ensure that this does not burden the public.”
The April quota reduction lowered the monthly BUDI95 allocation from 300 liters to 200 liters. Sunday’s decision reverses that reduction from Sept. 1.
Anwar said the government would continue to review measures affecting household expenses and business costs as economic conditions evolve.
The six measures announced Sunday therefore provide immediate changes to fuel allocations and selected government support programs, while Malaysia heads into the second half of 2026 with economic growth above the rate recorded during the same period last year.
