Government saves RM5 billion from retargeting diesel subsidies – MOF
KUALA LUMPUR: The government has saved around RM5 billion a year through the retargeting of diesel subsidies under the BUDI MADANI Diesel Programme (BUDI Diesel) since it was first implemented on June 10, 2024, said the Ministry of Finance (MoF).
MoF said these savings have reduced pressure on the country’s fiscal and allowed funds to be redirected for more productive purposes, including strengthening the people’s social safety net.
“Among the Government’s proactive measures is to improve cash assistance such as the Rahmah Cash Contribution (STR) and Rahmah Basic Contribution (SARA), by increasing the allocation to RM13 billion under the 2025 Budget, compared to RM10 billion ringgit in the previous year and subsequently to RM15 billion through the SARA Appreciation initiative.
“The savings are also used to finance development projects that can increase the country’s productive capacity,” said the MoF in a written response on the Parliament website today.
In addition, MoF announced that more than 140,000 Individual BUDI recipients and 180,000 Agri-Commodity BUDI recipients have been approved, with total payments of RM430 million and RM350 million respectively.
For the goods land transport vehicle segment under the BUDI MySubsidi Diesel Program, as of Sept 30, 2025, MoF said a total of 121,618 companies involving 355,074 vehicles have been approved for the convenience of using the “fleet card”.
This measure allows the vehicles concerned to obtain diesel supplies at a price of RM2.15 per litre, as well as ensuring that the logistics sector’s operating costs do not increase dramatically and that the prices of essential goods remain affordable.
MoF said this in response to a question from Abdul Khalib Abdullah (PN-Rompin) who wanted to know the effectiveness of targeting petrol and diesel subsidies in reducing leakages and the country’s fiscal burden.
Apart from that, through the BUDI MADANI RON95 (BUDI95) initiative which began implementation last September, MoF said more than 12.4 million citizens out of 16.5 million eligible have enjoyed the price of RON95 at RM1.99 per litre, involving a sales value of more than RM1.85 billion or the consumption of more than 930 million litres as of Oct 21, 2025.
Meanwhile, the Ministry of Economy in the same written response informed that for the targeted subsidy distribution of RON95 petrol, the Main Database (PADU) is one of the reference databases for verification purposes by the MoF.
“Based on the available data, the government can identify socio-economic intervention programs for specific target groups. In this regard, PADU can be utilized as a database that can be used as a reference by relevant government agencies,” said the ministry.
— BERNAMA
