Malaysia has set the new ceiling pump price of diesel in peninsular Malaysia to RM3.35 per litre, up from RM2.15 per litre previously. This is effective from midnight of June 10, 2024.

Why was this announced?

  • This is part of the Malaysian government’s plan to stop leakages in subsidised diesel. It believed that this will save around RM4 billion in government spending each year.

  • Putrajaya has since said that it has no choice but to implement this now, despite mounting criticism from the public.

Prime Minister Datuk Seri Anwar Ibrahim told civil servants on June 10, 2024 that the move has been imminent and hinted that previous administrations were also considering it.

  • “In fact, we have said that all prime ministers before this had agreed on the targeted subsidy, but there was no political will to implement it because of the risks involved. However, to save the country, we have no choice.”

According to Second Finance Minister Datuk Seri Amir Hamzah Azizan during the announcement on June 9, 2024:

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  • “The amount of subsidised diesel increased sharply from 6.1 billion litres in 2019 to 10.8 billion litres in 2023 although the number of diesel powered vehicles did not increase significantly. This shows that the subsidy given was leaking, and could not be benefitted by the target group.”

Second Finance Minister Datuk Seri Amir Hamzah Azizan speaks during the press conference regarding the diesel subsidy targeting in Putrajaya on June 9, 2024. — Picture by Shafwan Zaidon
Second Finance Minister Datuk Seri Amir Hamzah Azizan speaks during the press conference regarding the diesel subsidy targeting in Putrajaya on June 9, 2024. — Picture by Shafwan Zaidon

Will this affect me?

  • This only applies to peninsular Malaysia, for now.

  • If you are a private owner of a diesel vehicle, you may be eligible for the Budi MySubsidi Diesel programme. More information on this below.

  • If you are a company using diesel vehicles for public transportation, school buses, local buses, express buses, ambulances, firefighters. hearses and logistics, you can apply for the Subsidised Diesel Control System (SKDS) fleet card.


According to Amir Hamzah, the leakages — which happened through illegal consumption or smuggling of diesel fuel to neighbouring countries — were due to Malaysia’s relatively cheap price of fuel. Even after this new price was announced, Malaysia’s price of diesel is among the lowest in the region.

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See Malay Mail’s chart here for comparison:

How was this new price set?

  • It is the unsubsidised market price based on the May 2024 average according to the Automatic Pricing Mechanism formula, according to Amir Hamzah.


Is this covered by the Budi Madani, or the Madani Subsidy Assistance Programme, launched in May 27, 2024? The Ministry of Finance has provided several infographics on the MySubsidi Diesel programme under Budi Madani.

Have a diesel vehicle?

  • If you are a Malaysian citizen with a household income below RM100,000 per year — you can get RM200 aid each month.
  • If you’re part of a company with any of the 33 types of vehicles listed below — you can apply for the SKDS fleet card. There is no deadline to apply.

For more information and to apply for this programme, go to budimadani.gov.my.


What have people said about this?

Several diesel users were anxious about the MySubsidi programme and the potential rise in costs of living. One of the users polled by Malay Mail said:

  • “I fear the increase in diesel will affect the general cost of living. This increase is a big jump. It doesn't give time for the users to get adjusted gradually.”

Writing to Malay Mail, Jeremy Lim, a senior data analyst at for the UN Sustainable Development Solutions Network and a writer and editor of Jentayu, a progressive writing collective, cautioned over the shocking price announcement and called for gradual implementation of subsidy rationalisation:

  • “The diesel subsidy rationalisation is the form announced in the evening on 9th June 2024 could hardly be considered gradual. A more than 50 per cent increase with no stages of adjustment over a certain time period is bound to be perceived by firms and consumer as a shock. Despite the Budi Madani subsidies and the exemption for certain vehicles, it will not soften the notion among all Malaysians that prices of most goods will rise, even if they do not know what proportion is appropriate.”

In May 2024, several academics have expressed concern about the potential repercussions of subsidy rationalisation on the country’s elderly population, since they depend on a fixed income, among others. Monash University Malaysia’s economist Sharon Koh said:

  • “When prices go up, the end consumers, often the elderly are usually the hardest hit. They have limited incomes, and if the cost of essential goods like vegetables rises, their quality of life deteriorates.”

Need to know more?

  • Haven’t received your fleet cards yet? Minister of Domestic Trade and Cost of Living Datuk Armizan Mohd Ali said just keep your receipts first.
  • This move was announced by Prime Minister Datuk Seri Anwar Ibrahim back in May 21, 2024 after the Cabinet agreed on it.
  • Malay Mail contributor Hafiz Hassan highlighted how previous prime ministers have also acknowledged leakages in subsidised diesel.
  • Sarawak Premier Tan Sri Abang Johari Openg asked the federal government to provide the state with more funds to research cheaper fuel sources, so it would not rely so much on diesel.