How does this diesel subsidy reform compare to the BUDI Madani RON95 scheme?

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Diesel Subsidy Reform Aligns with BUDI Madani RON95 Scheme for Targeted Distribution

The upcoming diesel subsidy reform, set to take effect in July 2026 with a price of RM2.10 per litre, will adopt a targeted approach for distribution that mirrors the existing BUDI Madani RON95 (BUDI95) scheme. This new mechanism will utilise MyKad verification to ensure that only eligible Malaysian citizens receive the subsidised fuel, thereby preventing leakage and protecting public funds. The core objective is to standardise subsidy distribution nationwide, a strategy already implemented with the BUDI95 initiative.
MyKad Verification as a Centralised Control Mechanism

A key feature of the reformed diesel subsidy programme is its reliance on MyKad verification. This system is designed to authenticate recipients, ensuring that only Malaysians are eligible for the subsidised rate of RM2.10 per litre. This mirrors the operational framework of BUDI95, where identification is crucial for determining subsidy eligibility. The aim is to prevent non-Malaysians or ineligible entities from accessing fuel at the subsidised price, which currently stands at RM4.37 per litre in Peninsular Malaysia and Sarawak.
Standardisation of Price and Distribution Methods

The reform seeks to unify both the price and the method of diesel subsidy distribution across the entire country. This move aligns with the established practices of the BUDI Madani RON95 scheme, which has already introduced a standardised approach to RON95 fuel subsidies. By creating a consistent framework, the government intends to simplify the subsidy process and enhance its effectiveness in reaching the intended beneficiaries.
Addressing Leakage Through Targeted Subsidies

The implementation of this targeted subsidy mechanism is a direct response to significant leakage issues arising from the substantial price difference between subsidised and unsubsidised diesel. By restricting access to eligible Malaysians through MyKad verification, the government aims to safeguard public funds. This approach is consistent with the principles behind BUDI95, which also prioritises targeted distribution to ensure subsidies benefit the intended recipients and are not exploited by ineligible parties.

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How does this diesel subsidy reform compare to the BUDI Madani RON95 scheme?

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