Over the weekend, Prime Minister Datuk Seri Anwar Ibrahim announced reforms to the targeted diesel subsidy programme, which will come into effect next month. Following this initial announcement, Finance Minister II Datuk Seri Amir Hamzah Azizan has disclosed further details on the new Budi Diesel system.
Under this mechanism, the government will allocate a basic monthly quota of 200 litres of subsidised diesel at RM2.10 per litre. Basically, the new approach mirrors the current BUDI95 programme for subsidised RON95 petrol, albeit with a few distinctions.
What you should know
Much like the BUDI95 programme, only Malaysian citizens who hold a valid driving licence are eligible for the diesel subsidy. In addition to this, they must own a privately registered diesel vehicle in their name. Finally, a valid road tax is required. And just like the BUDI95 programme, the Budi Diesel mechanism will be based on the user’s MyKad.
As mentioned earlier, eligible individuals will have a monthly quota of 200 litres. That said, this quota is shared between diesel and RON95. So, a motorist can use part of their allocation for diesel and the remainder for petrol, with both counting towards the 200-litre total. According to Amir Hamzah, this approach provides flexibility for users to manage fuel consumption according to their needs.
Other than that, those who own jeeps and pickup trucks may apply for an additional allocation of 100 litres. If approved, these individuals will have a total quota of 300 litres per month.
This extra allowance is aimed at supporting groups with higher fuel requirements, such as micro, small and medium enterprises (MSMEs), and individuals who commute from rural and remote areas. Furthermore, the minister explained that the quota should be sufficient, as roughly 95% of diesel users consume less than 300 litres per month.
Implementation timeline
While the new system will take effect on 1 July 2026, motorists can check their eligibility and quota via the official online portal starting today. Additionally, eligible jeep and pickup truck owners can apply for the additional 100-litre quota online, or at LHDN offices and UTCs. Ahead of the full implementation, eligible private diesel vehicle owners in Peninsular Malaysia will have early access to the new Budi Diesel system starting 27 June 2026.
In addition to this, the government is expanding the Subsidised Diesel Control System (SKDS) to East Malaysia. Through this system, commercial users can purchase diesel at a subsidised price of RM2.15 per litre using fleet cards. Meanwhile, existing subsidies for groups like fishermen, small farmers, and public transport operators will continue.
(Source: MOF via Facebook [1], [2], The Star)
