THE targeted diesel subsidy programme for commercial vehicles has entered a new phase with the successful rollout of the Subsidised Diesel Control System (SKDS) in Sabah, Sarawak and the Federal Territory of Labuan, reinforcing the government's nationwide efforts to ensure fuel subsidies reach only eligible recipients while enhancing transparency through digital monitoring.
The latest milestone was marked by the presentation of SKDS fleet cards to approved companies, with cards issued by Petronas, Shell and Petron to enable eligible businesses to purchase subsidised diesel under the scheme.
The targeted diesel subsidy mechanism was first introduced in Peninsular Malaysia on 10 June 2024 before being expanded to Sabah, Sarawak and Labuan on 1 July 2026.
Under the subsidy framework, the Ministry of Domestic Trade and Cost of Living (KPDN) is responsible for regulating diesel subsidy distribution for commercial vehicles through SKDS, while other targeted diesel subsidy programmes are administered by their respective lead ministries.
These include the BUDI Diesel programme under the Ministry of Finance, the BUDI Agri-Komoditi scheme under the Ministry of Plantation and Commodities, and the Fishermen's Diesel and Petrol Subsidy Scheme under the Ministry of Agriculture and Food Security.
Applications for SKDS registration in Sabah, Sarawak and Labuan opened on 4 May 2026, covering eligible companies in the public land transport sector, consumer goods land transport sector, and private company-owned jeep and pickup vehicle category.
As of 18 July 2026, a total of 172,955 companies involving 464,797 commercial vehicles had registered under SKDS nationwide.
In Sabah, Sarawak and Labuan alone, 28,127 companies with 68,669 vehicles have been registered under the programme. This comprises 2,116 companies with 13,557 vehicles in the public land transport sector, 3,433 companies with 18,770 vehicles transporting essential consumer goods, and 22,578 companies operating 36,342 company-owned jeeps and pickup trucks.
The ministry said the rising registration figures demonstrate encouraging progress in the implementation of SKDS across East Malaysia, with approved companies now proceeding to obtain fleet cards from participating oil companies.
KPDN expressed its appreciation to Petronas, Shell and Petron for their close cooperation in ensuring the smooth issuance of fleet cards to eligible companies.
The ministry said the fleet card mechanism enables every subsidised diesel purchase to be recorded digitally, strengthening oversight, reducing the risk of subsidy leakages and ensuring government assistance reaches its intended beneficiaries.
KPDN also urged all eligible companies that have yet to register under SKDS to submit their applications through the MySubsidi portal without delay.
Following the full implementation of the SKDS fleet card system in Sabah, Sarawak and Labuan from 1 July 2026, the ministry said it is working with the Ministry of Finance to evaluate several proposals aimed at improving the scheme based on operational experience, industry feedback and implementation issues identified on the ground.
At the same time, KPDN will continue engagement sessions with the Sabah and Sarawak state governments to address operational challenges unique to the three territories, ensuring policy implementation reflects practical requirements while preserving the core objectives of targeted subsidies and leakage prevention.
KPDN Minister Datuk Armizan Mohd Ali reaffirmed that the ministry will continue working closely with the Ministry of Finance, state governments, oil companies and other stakeholders to further strengthen the implementation of SKDS nationwide. - July 19, 2026
