MALAYSIA'S rollout of the BUDI MADANI Diesel (BUDI Diesel) programme will not expand the country's fuel subsidy scheme or place additional pressure on government finances, Deputy Finance Minister Liew Chin Tong said.
Instead, he said the initiative consolidates existing diesel subsidy programmes under a single targeted framework to improve efficiency, reduce leakages and strengthen subsidy delivery.
"There is no expansion of the subsidy programme. Essentially, we are now placing all subsidies, including diesel, under the BUDI framework.
"Previously, diesel users received cash subsidies and additional assistance through separate mechanisms. Now, everything has been consolidated under the BUDI system to ensure assistance is delivered in a more organised and effective manner," he said after an ACCA Mid-Year Conference fireside chat.
Liew said bringing all diesel subsidies under the BUDI framework would allow the government to tighten controls against subsidy abuse, particularly fuel smuggling and the purchase of subsidised fuel by foreign nationals.
He said the technology underpinning the BUDI95 mechanism for RON95 petrol had already demonstrated its effectiveness in ensuring that only eligible Malaysians benefit from subsidised fuel.
"What the BUDI framework delivers is that smugglers will no longer be able to purchase subsidised fuel, and foreign nationals will also no longer be able to enjoy subsidised prices.
"This measure will reduce the government's financial burden because it curbs smuggling activities and prevents foreigners from obtaining subsidised petrol or diesel," BH quoted him saying.
The Ministry of Finance previously announced that about 700,000 private diesel vehicle owners will be eligible to purchase subsidised diesel at RM2.10 per litre using their MyKad under the BUDI Diesel mechanism at petrol stations nationwide.
In addition, the Subsidised Diesel Control Scheme (SKDS) has been expanded to Sabah and Sarawak, enabling around 70,000 eligible commercial vehicles, particularly those transporting consumer goods, to purchase subsidised diesel at RM2.15 per litre using oil company fleet cards.
Under the new mechanism, each eligible individual will receive a base monthly fuel quota of up to 200 litres, which can be used flexibly according to actual consumption for purchases of either subsidised diesel or subsidised RON95 petrol, subject to their remaining monthly entitlement.
The government said the approach ensures subsidies are allocated based on actual fuel usage rather than fuel type, while giving recipients greater flexibility to manage their monthly fuel consumption.
According to official data, nearly 90 per cent of motorists in Malaysia consume less than 200 litres of fuel each month, meaning the basic allocation is expected to be sufficient for the vast majority of eligible recipients. - - June 24, 2026
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