KOTA KINABALU: June 23, 2026 – Diesel subsidies will only be enjoyed by eligible Malaysian citizens through MyKad verification when the full implementation of the BUDI MADANI Diesel (BUDI Diesel) programme begins on 1 July.
Finance Minister II Datuk Seri Amir Hamzah Azizan said the subsidy targeting reform would also allow the subsidised diesel price to be reduced to RM2.10 per litre, compared to the current RM2.15 per litre in Sabah, Sarawak and the Federal Territory of Labuan.
He said the measure would ensure that non-citizens and ineligible parties no longer benefited from government diesel subsidies, thereby curbing leakage and fuel smuggling activities.
“Through BUDI Diesel, subsidies are now only given to eligible Malaysians via MyKad verification.
“The savings achieved by closing the loopholes for leakage and curbing smuggling enable the MADANI Government to lower the subsidised diesel price to RM2.10 per litre for eligible Malaysians,” he said.
He was speaking at a media briefing on the implementation of the Diesel Subsidy Targeting Reform for Sabah state, held at the Sabah International Convention Centre (SICC) on Tuesday.
According to the minister, from 1 July 2026, the pump price of diesel will be set at the unsubsidised market rate, while government subsidies will only be channelled to eligible recipients through the MyKad verification system.
Under the reform, each eligible individual will receive a base entitlement of 200 litres per month, which can be used to purchase subsidised fuel, including RON95 and diesel.
Government data shows that nearly 90% of drivers in Malaysia use less than 200 litres of fuel per month, making the quota sufficient for the majority of users.
Taking into account the situation in Sabah, Sarawak and Labuan, where reliance on pickup trucks and jeeps is higher, owners of such vehicles may apply for an additional 100 litres per month, bringing their total entitlement to up to 300 litres per month.
Based on current usage data, an estimated 95% of diesel users consume less than 300 litres per month.
The MADANI Government has also taken into consideration the needs of other groups, including riverboat operators, generator owners in remote areas, and individuals who depend on diesel for their daily livelihoods.
According to Datuk Seri Amir Hamzah, the government is finalising specific mechanisms to ensure that these groups continue to receive appropriate assistance.
For Sabah, the Federal Government is cooperating with the Sabah state government and relevant agencies, including the Sabah Rubber Industry Board (LIGS) and the Sabah Ports and Harbours Department (JPDS), to obtain and finalise data on eligible recipients, including boat operators and users who require subsidised diesel.
The minister also made a visit to a petrol station in Tuaran to inspect operational readiness ahead of the full implementation of BUDI Diesel on 1 July.
Among the aspects reviewed were the smooth functioning of the MyKad verification system, the preparedness of petrol station staff, and the efficiency of transaction processes at the pumps.
He said that based on surveys conducted with oil companies and petrol station operators, operational preparations were found to be at a satisfactory level.
The Federal Government will continue to work closely with the Sabah state government, oil companies, petrol station operators and implementing agencies to ensure the smooth rollout of BUDI Diesel and that subsidy benefits reach eligible Malaysians.
