KUALA LUMPUR (June 22): The government will float diesel prices and implement Budi Diesel nationwide from July 1, with eligible Malaysians able to buy subsidised diesel at RM2.10 per litre using MyKad verification.
Around 700,000 private diesel vehicle owners will receive a monthly fuel quota of up to 200 litres shared between diesel and RON95. Eligible diesel pickup truck and SUV owners can apply for an extra 100 litres, increasing their monthly quota to 300 litres.
“This approach ensures subsidies are provided to eligible recipients based on their actual usage, regardless of whether the fuel used is diesel or RON95. It also gives recipients flexibility to manage their fuel consumption according to their monthly needs,” Minister of Finance II Datuk Seri Amir Hamzah Azizan said in a statement released after a media briefing.
The media briefing was also attended by Minister of Domestic Trade and Cost of Living Datuk Armizan Mohd Ali and representatives from the Ministry of Transport.
Based on statistics, nearly 90% of drivers in Malaysia use less than 200 litres of fuel per month. Therefore, the basic 200-litre monthly quota is expected to be sufficient for most eligible recipients.
The move replaces the existing RM400 monthly Budi Diesel cash aid with direct fuel subsidies, aimed at reducing leakages and ensuring subsidies reach targeted groups. Existing Budi Diesel beneficiaries will be automatically shifted to this new system without the need to reapply.
“This reform of the diesel subsidy targeting mechanism aims to standardise the diesel subsidy mechanism nationwide through a uniform, transparent and user-friendly system,” said Amir in the statement.
In addition to private diesel vehicle owners, the Budi Diesel facility will also be extended to groups such as river boat operators and generator (genset) owners in rural areas.
The federal government will work closely with the Sabah and Sarawak state governments to ensure wider access to subsidised diesel for eligible Malaysians.
The Finance Ministry (MOF) said early access to the system will be available from June 27 for eligible users in Peninsular Malaysia as part of the rollout process, ahead of full implementation on July 1.
Commercial users under the Subsidised Diesel Control System (SKDS) will continue to access controlled pricing through fleet cards. In Sabah and Sarawak, the SKDS coverage will be extended to around 70,000 eligible commercial vehicles, said the MOF.
Diesel is currently sold at an unsubsidised price of RM4.37 per litre in Peninsular Malaysia and at a subsidised price of RM2.15 per litre in Sabah and Sarawak.
The MOF said the eligibility-based model is designed to align subsidy usage with actual consumption patterns, with flexibility allowing recipients to use their entitlement for either diesel or RON95 purchases depending on need.
Existing diesel subsidies for key sectors will continue, including cheaper diesel for fishermen, small farmers, and public transport operators. The government will monitor the Budi Diesel rollout to ensure a smooth transition. Eligible private diesel vehicle owners can check their status online and apply for an extra quota if they qualify from next Monday (June 22).