PUTRAJAYA, June 22 — The government will roll out a new MyKad-based diesel subsidy system from July 1, allowing eligible Malaysians to buy diesel at RM2.10 per litre while moving all diesel prices to market rates nationwide.

The move marks the biggest change to the Budi Diesel programme since targeted diesel subsidies were introduced in June 2024, replacing monthly cash assistance for individual recipients with direct fuel subsidies at the pump.

Here’s what motorists need to know.

What is changing?

Beginning July 1, diesel will be sold at unsubsidised prices nationwide.

However, eligible Malaysians who own diesel vehicles will be able to purchase subsidised diesel at RM2.10 per litre by verifying their identity using their MyKad at petrol stations.

The mechanism mirrors the existing Budi95 system for RON95 petrol, which Finance Minister II Datuk Seri Amir Hamzah said when presenting the targeted diesel subsidy reform at the Ministry of Finance building here, has helped reduce subsidy leakages while ensuring assistance reaches intended recipients.

Who qualifies?

The scheme is open to Malaysian citizens who:

  • Hold a valid driving licence;
  • Own a diesel-powered vehicle registered with the Road Transport Department (JPJ); and
  • Have a valid road tax.

The government estimates around 700,000 private diesel vehicle owners will qualify.

River boat operators and owners of generators in remote areas will also be included under separate arrangements.

How does the subsidy work?

The diesel subsidy works exactly as the Budi95 programme.

Eligible recipients will use their MyKad at petrol stations to verify their entitlement before purchasing fuel.

Payment can still be made using cash, debit cards, credit cards or selected e-wallets.

The subsidy is tied to a monthly fuel quota rather than cash payments.

For existing Budi Diesel Individual recipients, the current RM400 monthly cash assistance will be discontinued and replaced automatically with the new subsidy mechanism.

No fresh application is required for current recipients.

How much subsidised fuel can I buy?

Each eligible individual will receive a basic allocation of 200 litres a month.

Unlike previous schemes, the quota can be shared between diesel and subsidised RON95 purchases.

For example, a motorist could use part of the allocation for diesel and the remainder for Ron95, with both counted against the same monthly quota.

The government says nearly 90 per cent of motorists use less than 200 litres of fuel a month, making the allocation sufficient for most recipients.

Why are pickup truck and SUV owners getting 100 litres more?

Owners of eligible diesel-powered pickup trucks and sport utility vehicles (SUVs) may apply for an additional 100 litres monthly.

This would raise their total entitlement to 300 litres a month.

The government said many pickup trucks are used by small traders and rural residents who travel longer distances, particularly in interior areas.

Officials estimate that 95 per cent of diesel users consume less than 300 litres monthly.

To put that into perspective, Amir Hamzah said the government had analysed fuel consumption patterns and found that a 300-litre monthly allocation would be sufficient for someone travelling daily between Marudi and Miri in Sarawak — a round trip of about 172km a day.

Amir Hamzah said owners of diesel-powered pickup trucks and SUVs who require the additional allocation must apply through the Budi Madani portal (www.budimadani.gov.my), with the extra 100 litres granted only upon approval.

Applications may also be made in person at LHDN offices, including at UTCs.

What about Sabah and Sarawak?

The system will be implemented in the same way across Peninsular Malaysia, Sabah and Sarawak.

At the same time, the Subsidised Diesel Control System (SKDS) will be expanded to East Malaysia, allowing around 70,000 eligible commercial vehicles to buy diesel at RM2.15 per litre using fleet cards.

The federal government is also working with the Sabah and Sarawak governments to ensure remote communities continue to have access to subsidised diesel.

What happens to other diesel subsidy programmes?

Several existing schemes will remain unchanged.

These include:

  • Diesel at RM1.65 per litre for fishermen;
  • Budi Agri-Komoditi assistance for farmers and smallholders; and
  • SKDS 1.0 diesel at RM1.88 per litre for public transport operators, including school and express buses.

When can people start checking eligibility?

Motorists can check their eligibility and monthly quota through the official Budi Madani portal from today.

Ahead of the full rollout, early access to the new Budi Diesel system will be available from June 27 for eligible private diesel vehicle owners in Peninsular Malaysia.