The price of subsidised diesel will be set at RM2.10 per litre nationwide from July 1, 2026. That’s good news for diesel vehicle owners who have had to pay more for diesel ever since fuel subsidy rationalisation began back in June 2024. Making matters more dire is the yet-to-be-resolved West Asia conflict, which sent diesel prices soaring over the past few months.
Prior to fuel subsidy rationalisation for diesel going live, the government sought to ease the burden of transition with Budi Madani Diesel (Budi Diesel), which provides direct cash transfers as a form of assistance. The initial amount provided to those eligible for Budi Diesel Individu assistance was RM200, which was later increased to RM400 in April this year.
However, the ministry of finance (MoF) said during its media briefing yesterday that cash assistance to offset the cost of diesel did not prove to be particularly effective. It also highlighted the non-uniformity of diesel subsidies in the country where the price of diesel in Sabah, Sarawak and Labuan was fixed at RM2.15 per litre, while it is much higher in Peninsular Malaysia.
As such, the ministry saw it fit to revise diesel subsidies so it is more uniformed across the country and beneficial to more of the rakyat. The result is a system that is in line with something we’ve been familiar with for some time: Budi Madani RON 95 (Budi95). On Monday (June 22, 2026), we were briefed on the new Budi Diesel by the MoF, and after some time to digest all the info present, here’s a FAQ to help you better understand it.
When is the new Budi Diesel starting?
As mentioned at the start, subsidised diesel will be priced at RM2.10 per litre nationwide starting from July 1, 2026. However, the ministry said there will be an “early access” period where those in Peninsular Malaysia will pay RM2.15 per litre – the same amount as it is currently in Sabah, Sarawak and Labuan – from June 27, 2026. It’s a short window, which we’re presuming will serve as a “trial” before the headline price comes into play.
How can I qualify for Budi Diesel?
Like with Budi95, you must be a Malaysian citizen with a valid identity card (MyKad) and driving licence (LMM), the latter also including probationary and learner’s licences. Additionally, you must personally own a diesel vehicle with a valid road tax (LKM), meaning it was must registered in your name (privately owned).
For example, if your family owns a diesel vehicle but it is registered to your father and not you, you are technically not eligible for Budi Diesel. The ministry pointed out that it is pulling data from the road transport department’s (JPJ) to validate this aspect.
Given the base requirement of being a Malaysian citizen, foreigners will not have access to Budi Diesel and will have to pay whatever unsubsidised price is at the pumps. This is not unlike petrol, where RON 95 has two-tier pricing, one being Budi95 and the other, unsubsidised. Prices of unsubsidised diesel and petrol will continue to be updated on a weekly basis, the same it has been for some time.
As always, foreign-registered vehicles can not be filled with RON 95, subsidised or otherwise, and subsidised diesel is also off limits.
How to I purchase subsidised diesel at RM2.10 per litre?
The mechanics are identical to that of Budi95. At the pump, you would first get your MyKad checked to see if you are eligible for Budi Diesel, following which you would make the payment and fuel up your vehicle.
Apps by fuel companies or e-wallet providers such as Setel and Touch ‘n Go will also be updated to support Budi Diesel, which means doing an e-KYC digital identity verification process if you haven’t already. This provides more convenience because you don’t need to insert your MyKad into a verification device.
This approach also means there’s no need for new hardware because what’s currently used for Budi95 can also be used for Budi Diesel, with only some backend or software changes needed.
Am I limited in terms of how much subsidised diesel I get?
Yes. Like Budi95, there is a monthly quota provided to those that are eligible for Budi Diesel. The ministry has set the quota at 200 litres per month, with this amount covering both subsidised RON 95 petrol and diesel – this is reset back to 200 litres every month.
This isn’t a case where you are are allowed 200 litres of Budi Diesel on top of the 200 litres allowance through Budi95. It’s 200 litres in total for both, so you’ll have to decide how best to use the quota provided to you monthly. Why 200 litres? That’s because the ministry’s research showed almost 90% of Malaysians use less than 200 litres of fuel monthly.
What if I need more than 200 litres per month?
For those that need more than 200 litres per month, they can apply for an additional 100 litres by applying via the budimadani.gov.my website or by going to the nearest Inland Revenue Board of Malaysia (LHDN) office. Those that are already presently eligible for Budi Diesel Individu cash assistance will automatically be eligible for the additional 100 litres.
Applications can be done from June 22, 2026 for owners of pick-up trucks or jips (SUVs typically) who either travel long distances as well as use their vehicles to enter deep interior areas or for business purposes – the ministry says 90% of privately owned diesel vehicles fit these criteria.
As seen in one of the presentation slides, the ministry expects 638,000 pick-up trucks and 93,000 jips to qualify for the additional 100 litres. Vehicles that are not either of these, such as diesel MPVs or sedans, are said to not be eligible.
The ministry determined that for those eligible for the higher quota of 300 litres per month will find the amount sufficient for the daily drive to and from work. It averaged the fuel consumption figures of a few diesel vehicles and used the back-and-forth trips between Marudi and Miri in Sarawak as an example.
Does Budi Diesel cover all types of diesel sold in Malaysia?
No. As we were told during a Q&A session during the briefing, Budi Diesel will only cover B10 or higher blends of diesel, so the B7 blend will continue to be unsubsidised. This is similar to petrol, where RON 95 is subsidised, while RON 97 is priced at the market rate.
How does this affect those that live in Sabah, Sarawak and Labuan?
Malaysians that live in these states have been paying RM2.15 per litre for diesel for the longest time, even when diesel subsidy rationalisation was implemented. The revised Budi Diesel lowers the price further but introduces the quota restriction, which didn’t exist previously.
The ministry says that shifting from the Budi Diesel Individu to this MyKad-based approach is more beneficial for Malaysians. It noted that the cash assistance system only benefitted around 180,000 people who needed to apply for the aid in the first place.
The newer system is said to benefit around 400,000 people in Peninsular Malaysia, plus another 300,000 or so in Sabah and Sarawak. Additionally, it is a more convenient system because the requirements are easily met and you only need your MyKad as the main point of verification.
Volatile pricing, especially when the numbers get bigger, also severely diminished the benefit of the cash assistance, which is not the case with the newer system that has a fixed diesel price, where you know precisely how much subsidised diesel you are entitled to monthly.
What if I need a fleet card?
The Subsidised Diesel Control Scheme (SKDS) has been around since 2013 and was updated in 2024 to cover 33 categories of commercial land transport and logistics vehicles. Still currently in its second iteration, SKDS 2.0 is being updated again now include two new categories and has now been expanded to Sabah, Sarawak and Labuan.
With SKDS, the price of diesel for public vehicles such as school buses or vans, express buses and stage buses (bas henti-henti) will remain at RM1.88 per litre. For various commercial vehicles, it also stays at RM2.15 per litre.
Owners of vehicle fleets will need to apply for SKDS, with applications for those in Sabah, Sarawak and Labuan open since May 4, 2026. As of that date, 32,352 applications have been received from the 75,006 qualified vehicles, the ministry pointed out.
What if I’m a farmer, own a boat or genset or drive a diesel vehicle for e-hailing?
Before the Budi Diesel revision, those with such circumstances in Sabah and Sarawak paid RM2.15 per litre for diesel. In Peninsular Malaysia, eligible farmers received cash assistance of RM400 via the ministry of agriculture and food security of Malaysia (KPKM) or ministry of plantation and commodities (KPK). Meanwhile, the remaining “other users” paid the unsubsidised price at the pump.
With the new system, farmers will continue to get the same cash assistance amount as before through the Budi Agri-Komoditi scheme. For fishermen, they will continue to enjoy diesel at RM1.65 per litre as they have been before.
For the rest, it is now RM2.10 per litre, with e-hailing drivers subject to the same requirements as mentioned above. Similar to their petrol counterparts, the quota for e-hailing drivers is tiered, starting with 200 litres if they travel up to 1,500 km. For travel distances over 1,500 km but below 5,000 km, the quota goes up to 600 litres, while it is 800 litres for distances over 5,000 km. E-hailing drivers cannot apply for the additional 100 litres, even if they own a pick-up truck or jip.
Explain it to me like we’re at a mamak
To put simply, it is the Budi95 system with diesel integrated into it – the government is bundling both subsidised fuels into what it calls ‘Budi Madani’.
With Budi95, you pay RM1.99 per litre for subsidised RON 95 petrol. With Budi Diesel, you pay RM2.10 per litre for subsidised diesel of B10 blend or higher. The collective quota you get per month for both fuels is 200 litres, but you can apply for an additional 100 litres if you own a pick-up truck or jip.
The subsidised diesel price of RM2.10 per litre comes into effect on July 1, 2026, but there will be a short period from June 27, 2026 where you pay RM2.15 per litre. To get Budi Diesel, you use your MyKad to validate your eligibility.
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Another half year or max 1 year… MADANI will TAPAO d! stay strong all people
Lee Kuan Yew was right. Give the opposition one chance to run the country, and watch them destroy it with their incompetence. We have received this good dose of incompetent governments since 2018. Humpty Dumpty cannot be put together again.
election coming ma! Anwar always cakap ada buat kerja. Ada buat kerja, apasah takut?