Kota Kinabalu: The implementation of the Budi Madani Diesel programme (Budi Diesel), which uses MyKad for verification, is expected to reduce leakages by up to one billion litres annually and allow eligible Malaysians to enjoy subsidised diesel at RM2.10 per litre from July 1.
Finance Minister II Datuk Seri Amir Hamzah Azizan said prior to this, diesel subsidies were enjoyed openly without any verification of consumer identity.
“Through Budi Diesel, the subsidy will now only be given to eligible Malaysians via MyKad verification.
“Savings from closing leakage loopholes and curbing smuggling will allow the Madani Government to lower the subsidised diesel price to RM2.10 per litre for eligible Malaysians,” he told a media conference after a briefing on the diesel subsidy reform at the Sabah International Convention Centre, Tuesday.
The new price represents a reduction from the current subsidised rate of RM2.15 per litre applicable in Sabah, Sarawak and Labuan.
Amir Hamzah said the shift to MyKad verification was the critical safeguard, as it restricted access to citizens only.
“If you are not a citizen, you cannot use it. You have to buy at the float price,” he said. “That is an important criterion in ensuring everyone can reduce the risk of leakage.” He added that the Government is targeting a reduction of a billion litres of diesel leakage nationally per year, which would also help stabilise domestic fuel supply.
Under the scheme, each eligible individual receives a base monthly quota of 200 litres, covering both RON95 and diesel purchases.
He said government data shows that nearly 90 per cent of drivers in Malaysia use fewer than 200 litres of fuel a month, meaning the base quota is expected to cover most eligible recipients.
For Sabah, Sarawak and Labuan, where pickup trucks and four-wheel-drives are more widely used, vehicle owners in those categories may apply for additional 100 litres per month through the official Budi Madani portal at www.budimadani.gov.my or at any Inland Revenue Board office, bringing their total eligibility to 300 litres.
Around 95 per cent of diesel users are estimated to consume less than 300 litres monthly. Amir Hamzah said registration under Budi Diesel is automatic for passenger vehicle owners, as it mirrors the system introduced for RON95 under Budi 95 in October last year, where citizens did not need to register separately.
“The rakyat do not need to register. As long as they have their IC, they are already registered in our system and enabled at fuel pumps. When you go, you insert your IC and your eligibility will be granted. Automatically,” said Amir Hamzah, who also visited a petrol kiosk along Jalan Tuaran-bypass in Manggatal.
Those seeking the additional 100-litre quota, however, need to apply separately through the portal or visit an Inland Revenue Board office for assistance.
On concerns about reaching communities in Sabah’s interior, he said the nationwide Budi 95 rollout had been applied uniformly across Sabah and Sarawak without distinction, and the same approach would be applied for the diesel subsidy rationalisation.
For other user groups such as river boat operators, gen-set users in rural areas and others who depend on diesel for their daily livelihoods, he said the Government is finalising specific mechanisms to ensure they continued to receive appropriate assistance.
For Sabah in particular, the Federal Government is working with the State Government and relevant agencies, including the Sabah Rubber Industry Board and the Sabah Ports and Harbours Department, to finalise data on eligible recipients.
For smallholder farmers and plantation workers under the Budi Agri-Commodity component, he said eligible recipients would receive cash assistance rather than a fuel quota, as the Government does not hold pre-existing registry data on individual petani and pekebun.
Registration is being carried out through the Ministry of Plantation Industries and Commodities, the Ministry of Agriculture and Food Security and state governments, based on criteria, including farm size.
“The whole idea is to give targeted subsidies, which means we are targeting the small players for assistance.
“When you are a large estate, such as Felda or IOI, you do not need subsidised diesel. Diesel subsidies are for the rakyat base and for smallholders,” he said.
Each eligible smallholder will receive RM200 per month in cash assistance, with an additional RM200 added during the current period of higher oil prices, bringing the total to RM400 per month, which they can use to purchase diesel at the unsubsidised price. There is no quota under this component.
Amir Hamzah said the scheme would be reviewed and refined over time as feedback came in, citing how the Budi 95 quota system had been adjusted after launch to accommodate high-mileage e-hailing drivers by linking additional quota to verified trip data from ride-hailing platforms through the Commercial Vehicle Licensing Board.
“When we have any feedback, we will make improvements in the process,” he said. “That is standard practice for all government projects.”He said savings generated from reduced leakage would be returned to consumers in the form of lower prices, pointing to the reduction from RM2.15 to RM2.10 as an example.
“If we do not protect the subsidy and allow it to go to places it should not, the rakyat lose out because we do not have the opportunity to lower prices due to insufficient funds,” he said.
He also cited public reporting of foreign-registered vehicles filling up on RON95 as a sign that Malaysians were already taking ownership of protecting their fuel entitlement.
“I am very happy that we have had many reports from people asking why Singapore-registered cars can fill up on RON95.
“That means our rakyat are saying no, this is our right. When they protect our rights, the country has more room to take better care of the rakyat,” he said.
