KUALA LUMPUR (June 21): Subsidised diesel for Malaysians will be reduced to RM2.10 per litre nationwide beginning July 2026.

The Ministry of Finance (MOF) said in a statement on Sunday that diesel price reduction will be implemented uniformly through an enhanced targeted diesel subsidy programme using the MyKad mechanism, similar to the mechanism used under the Budi Madani RON95 (Budi95) programme.   

“Through this improvement, Malaysians will enjoy diesel at the same price and through the same mechanism throughout the country. The diesel subsidy will be channelled directly to Malaysians through MyKad validation, while non-Malaysians and those who are not eligible will purchase diesel at market price,” said the MOF in the statement.

The ministry added that given the strain on global oil supply brought about by the Middle East crisis, the move is important to ensure that the subsidy is enjoyed only by Malaysians while reducing leakages and smuggling of subsidised diesel.

The MOF said the significant difference between the existing subsidised diesel price and market price has led to leakages and smuggling of subsidised diesel, including across international borders. Diesel is currently sold at a subsidised price of RM2.15 per litre in Sabah and Sarawak and at an unsubsidised price of RM4.37 per litre in Peninsular Malaysia.  

With the enhanced targeted diesel subsidy programme, the market price of diesel in Sabah and Sarawak will be aligned to the market price in Peninsular Malaysia, said the MOF. That means that non-Malaysians in Sabah and Sarawak will no longer enjoy the subsidised price.  

The ministry also highlighted that with the enhanced programme, Malaysians in Sabah and Sarawak with diesel powered vehicles will enjoy a reduction in subsidised diesel price of RM2.10 per litre, from RM2.15 per litre.   

Second Finance Minister Datuk Seri Amir Hamzah Azizan will be providing more information on the implementation of the enhanced targeted diesel subsidy programme on Monday (June 22).