How does the new diesel subsidy mechanism compare to the BUDI Madani RON95 approach?

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The New Diesel Subsidy Mechanism Mirrors the BUDI Madani RON95 Approach Through MyKad Verification

The new diesel subsidy mechanism will adopt a targeted approach, using MyKad verification to ensure that only eligible Malaysians benefit from subsidised fuel. This strategy is directly modelled after the system implemented for the BUDI Madani RON95 (BUDI95) programme. The aim is to protect public funds by preventing ineligible entities from accessing subsidised rates and to unify the distribution method nationwide.
MyKad Verification as the Core of Eligibility

A central tenet of the upcoming diesel subsidy reform is the reliance on MyKad verification. This method is designed to strictly identify eligible Malaysian citizens for subsidised fuel. By linking access to the MyKad, the government intends to safeguard public finances and ensure that individuals or parties not meeting the criteria will be required to pay the market-determined, unsubsidised price.
Unification of Price and Distribution Methods

This reform seeks to establish a consistent system for diesel subsidies across the entire country. The statement indicates that the new mechanism will standardise both the price of subsidised diesel and the method through which it is distributed. This unification mirrors the approach taken with the BUDI Madani RON95 programme, suggesting a move towards a more streamlined and equitable subsidy framework.
Addressing Substantial Leakages

The Ministry of Finance has highlighted that this shift is a necessary measure to combat significant leakages within the current subsidy system. The substantial difference between the subsidised diesel price and the unsubsidised market price has historically led to fuel being diverted for non-eligible uses. By targeting subsidies through MyKad verification, the government aims to curb such diversions and ensure that the financial benefits reach the intended recipients.

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How does the new diesel subsidy mechanism compare to the BUDI Madani RON95 approach?

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