Malaysia Changes Solar Subsidies, Cash Aid Replaced by Fuel Quota
JAKARTA - The Malaysian government will change the solar subsidy scheme starting July 1. Monthly cash assistance for recipients of Budi Diesel, Malaysia's targeted solar subsidy program, will be discontinued and replaced with direct subsidies at gas stations.
As reported by Malay Mail, quoted Tuesday, June 23, eligible residents will be able to buy diesel at RM2.10 per liter, while the price of diesel outside the subsidy scheme will follow market prices.
This policy is the biggest change since Malaysia implemented targeted solar subsidies in June 2024. The government considers this new system to be more targeted and can reduce subsidy leakage.
The scheme applies to Malaysian citizens who have an active SIM, a diesel vehicle registered with the Department of Road Transport or JPJ, and a valid road tax.
The government estimates that around 700,000 private diesel vehicle owners will qualify. River boat operators and generator owners in remote areas will also receive subsidy facilities through a separate mechanism.
The way it works is similar to the Budi95 program for RON95 gasoline. Users simply verify their identity using MyKad, Malaysia's electronic national identity card, at a gas station before buying subsidized fuel.
Fixed payments can be made with cash, debit cards, credit cards, and certain digital wallets.
The biggest change is in the form of assistance. If previously the recipient of Budi Diesel Individual received a cash assistance of RM400 per month, starting in July the assistance will automatically change to a subsidized fuel quota.
Long-term recipients do not need to apply for a new permit.
Each recipient receives a basic quota of 200 liters per month. The quota can be used to buy subsidized RON95 gasoline and diesel in the same allocation.
The Malaysian government said that almost 90 percent of drivers use less than 200 liters of fuel per month, so the quota is considered sufficient for the needs of the majority of recipients.
For owners of diesel-powered pickups and SUVs, the government has opened an additional quota of 100 liters per month. If approved, their total quota will be 300 liters.
According to the Malaysian government, many pickup trucks are used by small traders and rural residents who have to travel further than regular vehicle users.
Officials estimate that around 95 percent of diesel users consume less than 300 liters per month.
The Minister of Finance II of Malaysia, Datuk Seri Amir Hamzah, said the government had studied the pattern of fuel consumption. As a result, the quota of 300 liters is considered sufficient for users who travel back and forth between Marudi and Miri in Sarawak with a distance of about 172 kilometers.
Owners of pickups and SUVs who need additional quotas must apply through the Budi Madani portal, Malaysia's official government platform for targeted subsidy programs. Applications can also be made directly at LHDN offices, including at UTC, Malaysia's government integrated service center.
This new system will be applicable in Peninsular Malaysia, Sabah, and Sarawak.
At the same time, still referring to the Malay Mail report, the Subsidized Solar Control System or SKDS was expanded to East Malaysia. Through the program, around 70,000 eligible commercial vehicles can buy solar at RM2.15 per liter using an armada card.
Meanwhile, several other subsidy programs are still running. Fishermen still get solar at RM1.65 per liter. The Budi Agri-Commodity Assistance for farmers and smallholders is also maintained.
Likewise, the SKDS 1.0 program which provides RM1.88 per liter of solar for public transportation operators, including school buses and express buses.
Drivers can check their eligibility status and monthly quota through the official Budi Madani portal. Initial access to the new system will also be opened starting June 27 for eligible private diesel vehicle owners in Peninsular Malaysia.