KUALA LUMPUR (May 19): The government has approved changes to the diesel subsidy system to reduce leakages while still keeping it working for legitimate businesses.
Economy Minister Akmal Nasrullah Mohd Nasir said the National Economic Action Council (MTEN) has agreed with the Ministry of Domestic Trade and Cost of Living’s plan to improve the Subsidised Diesel Control System (SKDS) to reduce misuse of diesel subsidies.
However, he did not share the exact details of what changes will be made during his weekly online briefing on the global supply situation, and there was no question-and-answer session.
“The proposed improvements to the SKDS concern the alignment of diesel subsidy quotas, which will be implemented in a balanced manner so that leakage controls can be reinforced without affecting business operations and the supply chain,” Akmal said on Tuesday.
He added that the government will continue giving RM300 per month under the Budi Madani Diesel assistance, along with an extra RM100 termporary aid for eligible people, to help reduce the impact of rising global fuel prices on the cost of living.
Under SKDS, more than 398,000 vehicles are registered as at April 9, comprising 375,500 land freight vehicles and 23,000 public transport vehicles, Akmal noted.
The system provides registered businesses with fleet cards to purchase diesel at subsidised prices. Monthly volume quotas apply based on vehicle type and business operations.
The system differs from the Budi Diesel scheme, which serves the general public via cash assistance. The aid rose to RM300 per month in April, from RM200 previously, as diesel prices surged.
In March, Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said the monthly allocation for SKDS ballooned to RM2.2 billion from about RM700 million previously. Comparatively, RM3.45 billion was the ministry's total allocation for SKDS for the whole of 2025.
The surge in the subsidy bill is on the back of escalating diesel prices. Prices of diesel are now nearly double the level before the outbreak of the Iran war at the end of February.