THE rationalisation of diesel subsidies has successfully reduced fuel leakage, particularly from smuggling activities, with sales transactions dropping by more than 300 million litres per month since June last year.
Deputy Finance Minister Lim Hui Ying said in the Dewan Rakyat on Wednesday, statistics indicated that around 465 million litres of diesel were sold monthly between June and December 2024, compared with approximately 770 million litres during the same period from January to May the previous year.
“The reduction in diesel sales reflects a decrease in subsidy leakage, which was partly attributed to smuggling. Commercial diesel sales also increased following the subsidy rationalisation, indicating that previously, subsidised diesel purchases from petrol stations may have been diverted for local commercial use, including construction machinery and electricity generators at factories,” she explained.
Lim was responding to supplementary questions from Chong Chieng Jen (PH-Stampin) during a parliamentary session on whether diesel sales had fallen in Peninsular Malaysia following the subsidy rationalisation introduced in June 2024.
Answering the original question, Lim highlighted that the BUDI MADANI Diesel programme had generated monthly savings of over RM400 million, amounting to around RM5 billion to date.
“These savings enable the government to redirect funds towards development projects and enhance social support networks through cash assistance schemes such as the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA). The targeted fuel subsidy under the Ekonomi MADANI framework demonstrates effectiveness in reducing leakage, optimising fiscal expenditure, and ensuring eligible groups continue to receive benefits,” she said.
Lim added that the government had also introduced Budi MADANI assistance for individuals and agricultural commodity owners, providing RM200 per month or RM2,400 per year to eligible diesel vehicle owners. Around 320,000 individuals—including farmers, smallholders, and livestock owners—received payments totalling RM850 million.
“For the land freight transport sector under the Budi MADANI Diesel programme, as of 30 September, 121,618 companies with 355,074 vehicles were approved for the use of fleet cards,” she said. - November 12, 2025
