PUTRAJAYA June 21, 2026 — The Malaysian government will reduce the price of subsidised diesel to RM2.10 per litre for eligible citizens starting July 2026, as part of a major overhaul to the diesel subsidy system.
Prime Minister Dato’ Seri Anwar Ibrahim, who also serves as Finance Minister, made the announcement today in Bintulu, Sarawak. The move aims to standardise subsidised diesel prices and access across Peninsular Malaysia, Sabah, and Sarawak while ensuring subsidies reach only Malaysian citizens.
The Ministry of Finance (MOF) confirmed the details in an official media statement. Under the new targeted subsidy mechanism, Malaysians will use MyKad verification at petrol stations — similar to the existing Budi Madani RON95 (Budi95) petrol subsidy system. Eligible buyers will pay the subsidised rate of RM2.10 per litre, while non-citizens and ineligible parties will purchase diesel at the full market price of RM4.37 per litre.
This reform unifies pricing nationwide. Previously, subsidised diesel in Sabah and Sarawak was priced at RM2.15 per litre, while the unsubsidised rate applied differently across regions. The new system will lower the pump price for citizens in East Malaysia from RM2.15 to RM2.10 per litre.
Key Objectives of the Reform
- Targeted delivery: Subsidies will go directly to Malaysian citizens via mandatory MyKad verification to prevent leakages.
- Curb smuggling and abuse: The government highlighted high losses from diesel smuggling, especially across borders, as a key reason for the MyKad requirement.
- Fairness and standardisation: All Malaysians will enjoy the same subsidised price and purchasing method regardless of location.
- Fiscal responsibility: Amid global oil price pressures and conflicts in West Asia, the reform ensures subsidies benefit citizens without unnecessary burden on the national budget.
The MOF emphasised that the change will reduce the gap between subsidised and market prices, discouraging smuggling while maintaining support for the rakyat.
Further implementation details will be announced by Second Finance Minister Senator Datuk Seri Amir Hamzah Azizan on June 22, 2026.
This announcement fulfills part of the MADANI Government’s commitment to rationalising subsidies and redirecting savings toward targeted assistance for Malaysians.
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