THE government will expand diesel subsidy eligibility to include small businesses operating diesel-powered jeeps and pick-up trucks registered under company ownership, while revising fixed subsidy quotas for commercial transport vehicles under the Subsidised Diesel Control System (SKDS).
Domestic Trade and Cost of Living Minister (KPDN) Datuk Armizan Mohd Ali said on Saturday, the measures form part of improvements approved by the Cabinet to ensure Malaysia's targeted fuel subsidy programme better addresses cost-of-living concerns while reducing leakages and safeguarding the country's fiscal position.
The enhancements come ahead of the nationwide implementation of the BUDI MADANI Diesel (BUDI Diesel) programme on July 1.
Armizan announced the measures after inspecting Shell's operations at Presint 18, Putrajaya, to assess the company's readiness for the nationwide rollout. The visit followed a similar inspection of Petronas preparations on June 15.
A pilot phase began on Friday to test the stability of the system, allowing eligible recipients at petrol stations across Peninsular Malaysia early access to subsidised diesel at RM2.15 per litre. The full BUDI Diesel subsidy price of RM2.10 per litre will take effect from July 1.
Under the expanded eligibility criteria, small businesses with diesel-powered jeeps and pick-up trucks registered under private business ownership will now qualify for subsidised diesel.
Previously, subsidies were limited to diesel vehicles registered under individuals through the BUDI Diesel programme and commercial goods transport vehicles registered under the appropriate transport classification through SKDS.
The Cabinet has also approved a review of fixed diesel quotas for selected categories of commercial goods transport vehicles under SKDS.
Armizan said the revised quotas would consider not only average fuel consumption by vehicle type but also technical factors including gross vehicle weight (GVW), engine capacity, lorry classification, fuel consumption levels and operational patterns and the government would continue monitoring fuel usage and subsidy expenditure for every registered vehicle and company under the SKDS mechanism.
The minister said Prime Minister Datuk Seri Anwar Ibrahim had instructed relevant ministries to refine the targeted subsidy programme following Cabinet discussions on the progress of BUDI Diesel, BUDI95, SKDS and the Subsidised Petrol Control System (SKPS).
KPDN, the Finance Ministry and the Transport Ministry have been directed to immediately implement the Cabinet's decisions, including identifying appropriate distribution mechanisms and making any necessary modifications and integration to existing systems.
Armizan also said inspections focused on transaction system stability, MyKad verification, digital authentication through participating oil companies' applications, staff training and customer service readiness to ensure smooth implementation.
Eligible Malaysians will be able to purchase subsidised diesel at RM2.10 per litre using either MyKad verification or participating oil companies' digital applications.
He said all 10 participating fuel companies — Petronas, Shell, Petron, Caltex, BHPetrol, Five, Smart Stream, Xcel, PETROS and IPTB — had confirmed their operational readiness, with 4,146 petrol stations nationwide prepared for the full implementation of BUDI Diesel. - June 27, 2026
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