Malaysia's nationwide BUDI Diesel rollout from 1 July 2026: Eligibility and MyKad verification explained

Following the announcement of a lower subsidised diesel price of RM2.10 per litre, the government has now confirmed how the nationwide BUDI Diesel mechanism will operate, including eligibility criteria, fuel allocations, and MyKad verification.

The Malaysia Government has confirmed the upcoming implementation of BUDI MADANI Diesel (BUDI Diesel), a move that will standardise diesel subsidy mechanisms, retail diesel pricing, and subsidy delivery methods nationwide from 1 July 2026.

The announcement follows Dato' Seri Anwar Ibrahim, Prime Minister and Minister of Finance’s earlier unveiling of the diesel subsidy targeting reform.

Speaking at a media briefing on Monday (22 June 2026), YB Senator Datuk Seri Amir Hamzah Azizan, Minister of Finance II said the reform is in line with the MADANI Government's subsidy-targeting principle that subsidies should be directed towards Malaysians rather than non-citizens.

"Accordingly, starting July 1, 2026, the retail price of diesel nationwide will be set at the unsubsidised level. Part of the savings from this measure will be used to benefit the people, including by reducing the subsidised price of diesel to RM2.10 per litre for the people who use diesel vehicles," he said.

The briefing was also attended by Datuk Armizan Mohd Ali, Minister of Domestic Trade and Cost of Living and representatives from the Ministry of Transport.

Datuk Seri Amir Hamzah said the reform aims to harmonise diesel subsidy implementation across the country through a uniform, transparent, and easy-to-use system.

He noted that, following the implementation of BUDI MADANI RON95 (BUDI95), the use of MyKad as a subsidy verification method for citizens has now been extended to diesel subsidies.

Under the BUDI Diesel mechanism, about 700,000 private diesel vehicle owners will be able to purchase subsidised diesel at RM2.10 per litre at petrol stations nationwide using their MyKad to verify eligibility.

In addition, the Subsidised Diesel Control Scheme (SKDS) has been expanded to Sabah and Sarawak. The expansion will allow approximately 70,000 eligible commercial vehicles, particularly those transporting consumer goods, to purchase subsidised diesel at RM2.15 per litre through fleet cards issued by oil companies.

According to MOF, BUDI Diesel is part of the government's ongoing efforts to ensure diesel subsidies continue reaching eligible recipients in a more targeted manner while reducing leakages, abuse, and smuggling activities that burden public finances.

Datuk Seri Amir Hamzah added that the lower subsidised diesel price is one way the resulting savings are being channelled back to the public, alongside initiatives such as the Rahmah Cash Contribution (STR) and Rahmah Basic Contribution (SARA), both of which have been enhanced to help ease cost-of-living pressures.

Integration with BUDI95

BUDI Diesel will be integrated with BUDI95, with MyKad serving as the verification tool for subsidy eligibility.

Fuel purchases can continue to be paid for through existing methods available at petrol stations, including cash, credit cards, debit cards, and selected e-wallets.

For existing BUDI Diesel Individual recipients, the current RM400 monthly cash assistance will be replaced by direct diesel subsidies through MyKad verification at petrol stations.

These recipients will be automatically transferred to the new mechanism without needing to submit another application.

Ahead of the full rollout on 1 July, eligible private diesel vehicle owners in Peninsular Malaysia will be able to access BUDI Diesel from 27 June 2026.

Eligibility limits and flexible usage

Under the new mechanism, each eligible individual will receive a basic subsidy allocation of up to 200 litres per month.

The allocation may be used flexibly for either subsidised diesel or subsidised RON95, subject to the recipient's remaining monthly balance.

The Ministry of Finance said this approach is intended to ensure subsidies are provided according to actual fuel consumption, regardless of whether the fuel used is diesel or RON95, while giving recipients greater flexibility in managing their monthly fuel needs.

Based on government statistics, nearly 90% of drivers in Malaysia consume less than 200 litres of fuel per month, meaning the allocation is expected to be sufficient for most recipients.

Eligible owners of diesel-powered pickup trucks and jeep-type vehicles may apply for an additional allocation of 100 litres per month, bringing their total monthly entitlement to 300 litres.

The government estimates that 95% of diesel users consume less than 300 litres per month. The additional allocation is intended to support those with higher transportation needs, particularly micro, small and medium enterprise (Perusahaan Mikro, Kecil dan Sederhana or PMKS) operators and individuals travelling from rural areas.

Apart from private diesel vehicle owners, the subsidised diesel facility has also been extended to groups such as river boat operators and generator owners in rural communities.

The Federal Government said it is working closely with the Sabah and Sarawak state governments to ensure inclusive access to subsidised diesel for eligible recipients.

Existing support for strategic sectors remains

The government confirmed that current diesel subsidy arrangements for strategic and critical sectors will continue.

These include subsidised diesel at RM1.65 per litre for fishermen, support under the BUDI Agri-Commodity programme for small farmers and registered commodity landholders, and diesel under SKDS 1.0 at RM1.88 per litre for land public transport operators, including school buses and express buses.

The government said it will continue monitoring the implementation of BUDI Diesel and introduce improvements where necessary to ensure a smooth transition without affecting eligible Malaysians' access to subsidised fuel.

Private diesel vehicle owners can check their eligibility status and monthly entitlement through the BUDI MADANI portal from 22 June 2026.

Eligible pickup truck and jeep owners may also apply for the additional 100-litre monthly allocation via the same portal or at Inland Revenue Board (Lembaga Hasil Dalam Negeri Malaysia or LHDNM) offices, including Urban Transformation Centres (UTCs).

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Lead image / Ministry of Finance