KUALA LUMPUR (April 14): Malaysia is raising the amount of cash aid under its diesel assistance programmes for April and increased support for paddy farmers amid continued rising energy costs.

The cash aid under Budi Agro-Komoditi and Budi Diesel Individu will be increased to RM400 from RM300 previously, according to a statement from the Ministry of Finance. Payments are expected to be disbursed on April 21, the ministry said.

The increase is the second since the start of the Middle East war, and is expected to benefit 200,000 farmers and smallholders as well as 150,000 individual diesel vehicle owners in Peninsular Malaysia.

Prices of unsubsidised diesel have soared to RM6.72 a litre in Peninsular Malaysia, pressuring a small segment of the population with vehicles and machinery, such as tractors and harvesters, left out of the subsidy programme.

Refined diesel has climbed to as high as US$250 per barrel, nearly three times pre-conflict levels, and the US have threatened to blockade the Strait of Hormuz after peace talks with Iran collapsed over the weekend, risking protracting a war now in its second month.

The waterway is critical for flow of about one-fifth of the world’s oil and gas supply.

“The government’s priority is clear: to ensure the security of essential goods supply for the people amid the sharp rise in oil prices and disruptions to the global supply chain,” said Prime Minister Datuk Seri Anwar Ibrahim, who is also the finance minister, in the statement.

The expansion is expected to cost the Malaysian government an additional RM75 million, bringing total subsidies to about RM7 billion for April.

Budi Diesel Individu is a monthly rebate for Malaysians driving private diesel vehicles with an annual household income of below RM100,000. The rebate was initially set at RM200 when the cash rebate was introduced in 2024.

However, it does not cover company-registered vehicles, e-hailing vehicles, diesel motorcycles, caravans, tour vans and tour buses. It also does not include luxury diesel vehicles that are less than 10-years-old, based on the government’s income-targeting criteria. Owners of luxury diesel vehicles that are more than 10-years-old may still be considered, subject to eligibility checks.

The programme also does not apply to vehicles registered in Sabah, Sarawak and Labuan, where diesel remains subsidised at a lower pump price of RM2.15.

The government is also increasing the Ploughing Incentive for Paddy Farmers for the 2026 planting season to RM300 per hectare compared to RM160 previously, involving an additional allocation of RM40 million.

The incentive is expected to benefit nearly 200,000 farmers, some of whom are due to begin planting this month, said the ministry.

Further, the special permit requirement for diesel purchases exceeding 20 litres for non-vehicle use will be relaxed, which means owners for agricultural machinery and equipment will be allowed to purchase diesel above the limit with the necessary registration documents upon application.

“The measures announced today involve additional spending, including to support food producers, in order to sustain food supply for the people,” Anwar added.