THE MADANI Government will overhaul Malaysia's diesel subsidy framework from July 2026 by introducing a nationwide MyKad-based verification system that reduces the subsidised retail price of diesel to RM2.10 per litre while ensuring fuel subsidies are channelled exclusively to eligible Malaysians.
Prime Minister Datuk Seri Anwar Ibrahim announced the reform in Bintulu, Sarawak today, describing it as a nationwide standardisation of the targeted diesel subsidy programme that will provide Malaysians with the same subsidised price and purchasing mechanism regardless of where they live.
The initiative adopts the MyKad-based verification model already introduced under the BUDI MADANI RON95 (BUDI95) programme, allowing subsidies to be provided directly to Malaysians at the point of purchase. Non-citizens and individuals who are not eligible will be required to purchase diesel at the full unsubsidised market price.
The Ministry of Finance (MOF), in a statement on Sunday, said the reform is being introduced against the backdrop of continued instability in the Middle East, which has placed pressure on global oil supplies and reinforced the need to ensure government subsidies are directed solely to Malaysian citizens.
The ministry added that the targeted approach would also address long-standing leakages and the smuggling of subsidised diesel, including across national borders, which have been driven by the significant gap between subsidised and market fuel prices.
Currently, subsidised diesel is sold at RM2.15 per litre at all petrol stations in Sabah and Sarawak, while the unsubsidised retail price in Peninsular Malaysia stands at RM4.37 per litre.
Under the new framework, diesel pricing in Sabah and Sarawak will be aligned with the nationwide system, ending access to subsidised diesel for non-citizens. At the same time, Malaysian motorists in Sabah and Sarawak who own diesel-powered vehicles will benefit from a reduction in the subsidised retail price from RM2.15 to RM2.10 per litre.
"As announced by Anwar (who also serves as Finance Minister), the reduction for diesel pump prices for Malaysians to RM2.10 per litre will begin in July 2026.
"This price reduction will be implemented through a nationwide targeted diesel subsidy reform using a MyKad-based mechanism, in line with the approach introduced under BUDI MADANI RON95 (BUDI95).
"Through this reform, Malaysians will enjoy the same subsidised price and purchasing mechanism nationwide."
The Ministry of Finance said further details on the implementation of the nationwide targeted diesel subsidy reform will be announced by Finance Minister II Datuk Seri Amir Hamzah Azizan, tomorrow. - June 21, 2026
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