MOF: Govt to set 200 litre quota for RM2.10 subsidised Budi Diesel

A car filling up diesel at a petrol station in Kuching. Photo credit: DayakDaily

By DayakDaily Team

KUCHING, June 22: The government will provide up to 200 litres of subsidised diesel per month at RM2.10 per litre through the Budi Madani Diesel (Budi Diesel) programme effective July 1.

In a statement, the Ministry of Finance (MOF) said this was announced by Second Finance Minister Senator Datuk Seri Amir Hamzah Azizan during a media briefing today.

“Consistent with the Madani government’s targeted subsidy principles, non-citizens should not enjoy subsidised fuel. Therefore, beginning July 1, 2026, the retail diesel price nationwide will be set at the unsubsidised rate. Part of the savings generated from this measure will be channelled back to benefit the people, including through a reduction in the subsidised diesel price to RM2.10 per litre for Malaysians using diesel vehicles.

“The diesel subsidy reform aims to harmonise the diesel subsidy mechanism nationwide through a system that is uniform, transparent and easy to use. Following the proven effectiveness of Budi95, the use of the MyKad as a subsidy verification tool for citizens will now be extended to diesel subsidies,” Amir Hamzah said.

The programme is expected to benefit 700,000 private diesel vehicle owners through the use of MyKad under the Budi Diesel mechanism at all petrol stations nationwide.

In addition, the Subsidised Diesel Control Scheme (SKDS) will be expanded to Sabah and Sarawak, enabling around 70,000 eligible commercial vehicles, particularly those transporting consumer goods, to purchase subsidised diesel at RM2.15 per litre using oil company fleet cards.

The ministry added that Budi Diesel will be integrated with Budi95, with MyKad serving as the subsidy eligibility verification tool. Fuel purchases can be paid for as usual using available payment methods at petrol stations, including cash, credit cards, debit cards and selected e-wallets.

For existing Budi Diesel Individual recipients, the monthly RM400 cash assistance will be replaced with direct diesel subsidies through MyKad verification at petrol stations. Existing recipients will be automatically transferred to the new mechanism without the need for a fresh application.

Under the mechanism, each eligible individual will receive a basic fuel subsidy quota of up to 200 litres per month. This quota can be used flexibly based on actual needs for the purchase of either subsidised diesel or subsidised RON95, subject to the recipient’s remaining monthly entitlement.

The approach ensures subsidies are provided based on actual fuel usage, regardless of whether the fuel used is diesel or RON95, while giving recipients greater flexibility in managing their monthly fuel consumption.

According to government data, nearly 90 per cent of drivers in Malaysia consume less than 200 litres of fuel per month, making the 200-litre quota sufficient for most eligible recipients.

Eligible private owners of diesel-powered pickup trucks and SUVs may apply for an additional 100 litres per month, increasing their total monthly entitlement to 300 litres.

This is expected to be sufficient as an estimated 95 per cent of diesel users consume less than 300 litres monthly. The additional quota is intended to support the needs of small and medium enterprises (SMEs) and individuals who commute from remote areas.

Apart from private diesel vehicle owners, the Budi Diesel facility will also be extended to groups such as river boat operators and generator owners in remote areas, allowing them to purchase subsidised diesel at RM2.10 per litre through MyKad verification.

“The federal government is working closely with the Sabah and Sarawak governments to ensure comprehensive coverage of subsidised diesel access,” said the ministry.

Early access to the system will open on June 27 for eligible private diesel vehicle owners in Peninsular Malaysia before the full nationwide rollout begins.

At the same time, existing diesel subsidy mechanisms for strategic and critical sectors will remain in place, including:

• Subsidised diesel at RM1.65 per litre for fishermen
• Budi Agri-Komoditi for smallholder farmers and registered commodity landowners
• SKDS 1.0 at RM1.88 per litre for public land transportation, including school buses and express buses

Private diesel vehicle owners can check their eligibility status and monthly quota online via the official Budi Madani portal beginning today.

Eligible pickup truck and SUV owners may also apply for the additional 100-litre monthly quota through the same portal from today. Applications may also be submitted physically at Inland Revenue Board (LHDN) offices, including Urban Transformation Centres (UTCs). — DayakDaily