Diesel vehicle owners across the country will pay just RM2.10 per litre for subsidised diesel starting July 2026, following an announcement by Prime Minister Datuk Seri Anwar Ibrahim in Bintulu, Sarawak, on 21 June. The price cut marks the first time Peninsular Malaysia will receive targeted diesel subsidies through the same MyKad verification system already used for RON95 petrol under the Budi Madani RON95 (Budi95) programme.
The Ministry of Finance (MOF) have confirmed that the new pricing applies uniformly across all states. If you drive a diesel vehicle and hold a valid MyKad, you will pay RM2.10 per litre at the pump. Non-citizens and ineligible parties will pay the unsubsidised market rate.
How The Pricing Changes Across States
The biggest price drop is for diesel users in Peninsular Malaysia. Since the targeted diesel subsidy was introduced in June 2024, Peninsular consumers have been paying the full market price of RM4.37 per litre for diesel. Under the new programme, eligible Malaysians in the Peninsula will pay RM2.10, a saving of RM2.27 on every litre.
For those in Sabah and Sarawak, the change is smaller. Diesel in both states is currently sold at a subsidised rate of RM2.15 per litre to everyone, including non-citizens. From July, the subsidised price drops by five sen to RM2.10 for eligible Malaysians. At the same time, the market price of diesel in Sabah and Sarawak will be aligned with Peninsular Malaysia’s rate of RM4.37 per litre. That means non-citizens in the two states will no longer enjoy the subsidised price.
The MyKad Mechanism
The MOF said the diesel subsidy will be delivered through MyKad verification at the pump, mirroring the process already in place for subsidised RON95 under Budi95. If you have used Budi95 to purchase RON95 at RM1.99 per litre, the diesel process should feel familiar.
The government has not yet confirmed whether a monthly litre quota will apply to subsidised diesel, or what that limit might be. Under the current Budi95 programme, the monthly quota for subsidised RON95 sits at 200 litres, reduced from 300 litres in April 2026. Second Finance Minister Datuk Seri Amir Hamzah Azizan is expected to provide full implementation details on 22 June.
Cutting Leakages And Cross-Border Smuggling
The MOF said the reform is driven partly by the need to curb leakages and cross-border smuggling of subsidised diesel. The government has previously estimated that the targeted diesel subsidy programme introduced in 2024 saved around RM5 billion annually by reducing these leakages. The latest reform extends that same logic nationwide, tying the subsidy to MyKad verification, removing access for non-citizens, and standardising the price so there is no incentive to move fuel across state lines.
The ongoing Middle East crisis and its strain on global oil supply also factored into the decision, according to the MOF. Fuel subsidy costs have surged in recent months, with the government spending an estimated RM7 billion a month as of April 2026 on petrol and diesel subsidies combined.
Savings Per Tank In Peninsular Malaysia And East Malaysia
If you drive a diesel vehicle in Peninsular Malaysia, filling a 60-litre tank currently costs you around RM262 at RM4.37 per litre. At RM2.10 per litre, that same fill drops to RM126, a saving of roughly RM136 per tank.
For drivers in Sabah and Sarawak, the five sen reduction from RM2.15 to RM2.10 saves about RM3 on the same 60-litre fill.
If the government applies a monthly litre cap similar to Budi95’s 200-litre limit, any diesel beyond the cap will cost RM4.37 per litre. At RM2.27 more per litre, that adds up fast for drivers who regularly exceed 200 litres a month. The government is expected to release full implementation details in the coming days.
For the latest weekly fuel prices, you can check our live petrol price updates. Some petrol credit cards cover diesel purchases and offer cashback on top of the subsidised price.
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