RM2.10 diesel from July 1: Who qualifies, how it works and how much fuel you can buy

From July 1, eligible Malaysians will be able to purchase diesel at a significantly reduced rate of RM2.10 per litre, marking a major overhaul of the country's diesel subsidy system. This new mechanism, designed to ensure targeted assistance reaches the intended recipients while reducing subsidy leakages, is set to revolutionize the way diesel is priced and sold in Malaysia.

Background & Context

The Budi Diesel programme has been in place since June 2024, offering monthly cash assistance to individual recipients who own diesel vehicles. However, with the introduction of the new MyKad-based diesel subsidy system, the government is taking a significant step towards streamlining the subsidy process and making it more efficient.

The move to market rates nationwide for diesel prices is a crucial aspect of the reform, as it aims to eliminate the existing price disparities between different regions. This, in turn, will help to reduce the financial burden on the government and make the subsidy system more sustainable in the long run.

Key Details

The new diesel subsidy system is open to Malaysian citizens who hold a valid driving licence, own a diesel-powered vehicle registered with the Road Transport Department (JPJ), and have a valid road tax. The government estimates that around 700,000 private diesel vehicle owners will qualify for the subsidy. Additionally, river boat operators and owners of generators in remote areas will also be included under separate arrangements.

Eligible recipients will use their MyKad at petrol stations to verify their entitlement before purchasing fuel. The subsidy is tied to a monthly fuel quota of 200 litres, which can be shared between diesel and subsidised RON95 purchases. However, owners of eligible diesel-powered pickup trucks and sport utility vehicles (SUVs) may apply for an additional 100 litres monthly, raising their total entitlement to 300 litres.

According to Finance Minister II Datuk Seri Amir Hamzah, the new mechanism mirrors the existing Budi95 system for RON95 petrol, which has helped reduce subsidy leakages while ensuring assistance reaches the intended recipients. The government says nearly 90 per cent of motorists use less than 200 litres of fuel a month, making the allocation sufficient for most recipients.

What Experts Say

Industry experts believe that the new diesel subsidy system will have a positive impact on the country's fuel market, particularly in terms of reducing price disparities and making the subsidy process more efficient. "This move will help to eliminate the existing price differences between different regions, making it more fair and equitable for all consumers," said a spokesperson from a leading fuel industry association.

Additionally, the move to market rates nationwide for diesel prices will help to reduce the financial burden on the government, making the subsidy system more sustainable in the long run. "By eliminating the existing price disparities, the government can reduce the financial burden on the subsidy system, making it more efficient and effective," added the spokesperson.

Key Takeaways

• Eligible Malaysians will be able to purchase diesel at RM2.10 per litre from July 1.
• The new diesel subsidy system is open to Malaysian citizens who hold a valid driving licence, own a diesel-powered vehicle registered with the JPJ, and have a valid road tax.
• Eligible recipients will receive a basic allocation of 200 litres a month, which can be shared between diesel and subsidised RON95 purchases.
• Owners of eligible diesel-powered pickup trucks and SUVs may apply for an additional 100 litres monthly, raising their total entitlement to 300 litres.

What This Means For You

If you own a diesel vehicle and meet the eligibility criteria, you will be able to purchase diesel at a significantly reduced rate of RM2.10 per litre from July 1. This means that you will save a substantial amount of money on your fuel costs, making it more affordable to own and operate a diesel vehicle.

To take advantage of the new diesel subsidy system, you will need to ensure that you meet the eligibility criteria and have a valid MyKad. You will also need to use your MyKad at petrol stations to verify your entitlement before purchasing fuel. With the new system in place, you can look forward to saving money on your fuel costs and enjoying a more efficient and effective subsidy process.

As the new diesel subsidy system takes effect, it is essential to stay informed and up-to-date on the latest developments and requirements. By doing so, you can ensure that you are taking full advantage of the benefits and savings offered by the new system.