Kuala Lampur, Oct. 1 -- When the government unveiled Budi95, many were quick to call it a step backwards. At RM1.99 per litre, the headline wasn't deficit reduction but cheaper fuel for all Malaysians with nothing more than a MyKad swipe. To some, that looked like retreat - a government backtracking on its own promise of fiscal discipline.

But look closer, and you'll see something else entirely. Budi95 is less about the 6 sen drop in pump price and more about planting the seed of a new system. It is the beginning of a cascade that could transform how Malaysia handles subsidies once and for all.

The great debate that came before

Earlier this year, the air was thick with speculation. Would subsidies be replaced with cash transfers? Would...