Malaysia to cut subsidised diesel price to RM2.10 per litre nationwide from July 2026

The nationwide reform will introduce a MyKad-based verification mechanism to ensure diesel subsidies are channelled directly to eligible Malaysians, while reducing leakage and smuggling.

The MADANI Government will reduce the price of subsidised diesel for Malaysians to RM2.10 per litre nationwide from July 2026, Dato' Seri Anwar Ibrahim, Prime Minister and Minister of Finance announced on 21 June (Sunday).

The price reduction will be implemented through a uniform diesel subsidy targeting reform, that uses a MyKad-based verification mechanism, in line with the approach adopted under the BUDI MADANI RON95 (BUD195) programme.

Under the new system, Malaysians across the country will receive the same subsidised diesel price and follow the same purchasing process. Diesel subsidies will be channelled directly to eligible Malaysians through MyKad verification, while non-citizens and other ineligible groups will be required to purchase diesel at the unsubsidised price.

According to the government, the reform is aimed at ensuring subsidies reach their intended recipients amid ongoing pressures on global oil supplies stemming from the West Asian crisis.

The Ministry of Finance noted that the move is also intended to address subsidy leakage and smuggling activities. The large gap between subsidised and unsubsidised diesel prices has created opportunities for subsidised fuel to be diverted for unauthorised use, including across borders.

Currently, diesel is sold at a subsidised retail price of RM2.15 per litre at petrol stations in Sabah and Sarawak. In comparison, the retail price of unsubsidised diesel in Peninsular Malaysia stands at RM4.37 per litre.

With the implementation of the targeted diesel subsidy reform, diesel pricing arrangements in Sabah and Sarawak will be aligned with those in Peninsular Malaysia. As a result, non-citizens will no longer benefit from subsidised diesel prices.

At the same time, Malaysians in Sabah and Sarawak who own diesel vehicles will see the subsidised retail price reduced from RM2.15 per litre to RM2.10 per litre.

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Lead image / PM Anwar Ibrahim's Facebook

In-article infographic / Ministry of FinanceIn article infographic / Ministry of Finance