Malaysia will roll out nationwide RM2.10 subsidised diesel scheme using MyKad from July 2026

MALAYSIA: The government will introduce a countrywide targeted diesel subsidy system in July 2026 that enables qualified Malaysians to purchase discounted diesel at RM2.10 (S$0.66) per litre via MyKad verification.

According to the announcement on the Official Ministry of Finance Portal, the mechanism of the enhanced subsidy will be applied uniformly throughout the country, similar to the existing Budi Madani RON95 (Budi95) programme. The new approach will see the subsidies being delivered directly to the Malaysians through the MyKad certification at the petrol stations.

Diesel will be sold at the prevailing market price for non-citizens and those not eligible for the subsidy.

This is to ensure that the government subsidies are enjoyed by the Malaysians solely and to reduce leakages and cross-border smuggling operations. The government said the large discrepancy between subsidised and market diesel prices had provided chances for abuse and unlawful commerce.

Currently, fuel is sold at the unsubsidised market price in Peninsular Malaysia, while Sabah and Sarawak continue to enjoy subsidised prices of RM2.15 a litre. Under the new structure, fuel prices in Sabah and Sarawak will be matched with the market pricing mechanism in Peninsular Malaysia.

This means that non-Malaysians in Sabah and Sarawak can no longer get discounted diesel. Diesel vehicle owners in both states would be able to enjoy a discounted subsidy price of RM2.10 per litre.

The administration said the program was especially crucial given uncertainty in global oil supplies from geopolitical conflicts in the Middle East. It said that subsidies should be targeted to those who really qualify.

Second Finance Minister Datuk Seri Amir Hamzah Azizan is expected to shed more light on the implementation of the improved targeted diesel subsidy programme.

The statewide implementation is another stage in the government’s wider subsidy rationalisation effort to strike a balance between budgetary sustainability and the well-being of Malaysian citizens.