24th October 2025 - 3 min read
The government has saved approximately RM5 billion a year through the diesel subsidy rationalisation exercise under the Budi Madani Diesel Programme (Budi Diesel), according to the Ministry of Finance (MOF). The initiative, implemented on 10 June 2024, forms part of ongoing efforts to ensure subsidies are better targeted and fiscally sustainable.
MOF stated that the savings have reduced pressure on the government’s finances, allowing funds to be redirected towards more productive purposes. These include bolstering social assistance programmes and financing development projects to enhance Malaysia’s productive capacity.
Among the key initiatives funded through these savings are improvements to cash assistance schemes such as Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara). Under Budget 2025, allocations for these programmes were increased to RM13 billion from RM10 billion in the previous year, with an additional boost to RM15 billion through the Sara Appreciation initiative.
Since its rollout, the Budi Diesel programme has benefited a wide range of individuals and businesses. More than 140,000 recipients under the Budi Individu category and 180,000 recipients under the Budi Agri-Komoditi category have been approved, with total disbursements amounting to RM430 million and RM350 million, respectively.
For the land transport goods vehicle segment under the Budi MySubsidi Diesel Programme, the MOF reported that as of 30 September 2025, 121,618 companies involving 355,074 vehicles have been approved to use fleet cards. These cards enable eligible vehicles to purchase diesel at RM2.15 per litre, helping logistics operators manage fuel costs and maintain stable prices for essential goods.
In addition to diesel rationalisation, the Budi Madani RON95 (Budi95) initiative was introduced in September 2025 to ensure that petrol subsidies reach eligible citizens more effectively. As of 21 October 2025, more than 12.4 million Malaysians out of 16.5 million eligible individuals have benefited from RON95 petrol priced at RM1.99 per litre. This represents fuel sales exceeding 930 million litres, valued at over RM1.85 billion.
The Ministry of Economy highlighted that the Central Database Hub (Padu) plays a key role in validating data for targeted subsidy distribution. Padu serves as a central reference for the MOF to verify eligibility and to design socio-economic intervention programmes based on accurate, up-to-date information.
According to the ministry, this integrated database allows government agencies to better identify and assist specific groups, ensuring that public resources are allocated efficiently and equitably.
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Samuel writes about personal finance and financial news, focusing on how banking updates, policies, and promotions affect everyday money decisions. He enjoys making complicated financial topics easier to follow. Outside of writing, he spends his time watching TV shows and occasionally convincing himself he will only watch one episode.
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