BUDI MADANI Diesel Subsidy Scheme Explained!

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Malaysia will abolish its diesel fuel subsidy, and replace it with a targeted subsidy scheme called BUDI MADANI. Here is what you need to know…


BUDI MADANI : A Targeted Diesel Subsidy Scheme

On 22 May 2024, Malaysia Prime Minister Anwar Ibrahim announced that the government will move to cut diesel subsidies in Peninsular Malaysia, with Sabah and Sarawak spared as the use of diesel vehicles is widespread in those states.

Currently, Euro 5 diesel is sold at the subsidised price of RM2.15 per litre, whereas the unsubsidised price is about RM3.33 per litre – about 55% higher.

Cutting this diesel subsidy is expected to save the government about RM4 billion (about US$850 million a year) – or about 0.2% of its GDP, and help to achieve the goal of the Fiscal Responsibility Act (FRA) to reduce the debt level so that it does not exceed 60% of the GDP, with a fiscal deficit of between 3.5% and 3% by 2025.

Instead of providing a direct subsidy of diesel fuel, Malaysia has announced a new diesel subsidy scheme called BUDI MADANI, which is much more limited, and targeted. Here is what you need to know…

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BUDI MADANI Diesel Subsidy Scheme Explained!


BUDI MADANI : 3 Categories Of Diesel Subsidy

On 27 May 2024, the Malaysia Ministry of Finance announced two categories for the BUDI MADANI diesel subsidy scheme, but there now appears to be a total of three categories.

BUDI Individu

BUDI Individu is the category for owners of private diesel vehicles. It offers a fixed cash aid of RM200 per month to qualified applicants who meet these requirements:

  1. Must be a Malaysian citizen
  2. Own a diesel vehicle that is registered with JPJ in Peninsular Malaysia, and is less than 10 years old, except for luxury vehicles*
  3. Diesel vehicle must have a valid road tax
  4. The annual income of the individual or couple must be RM100,000 and below

* What constitutes a luxury vehicle is currently undefined

Applications for BUDI Individu will be cross-checked with the Inland Revenue Board of Malaysia (LHDN) to eliminate owners of luxury diesel vehicles that is less than 10 years old, and high-income individuals (T20).

In addition, the Ministry of Finance just added new limitations – these vehicles do NOT qualify for BUDI Individu:

  1. Diesel motorcycle
  2. Privately-licensed diesel vehicles used by a company or organisation
  3. Vehicles registered for e-hailing use
  4. These vehicle types – caravan, motorhome, tour van, tour bus

BUDI Agri-Komoditi

BUDI Agri-Komoditi is the category for farmers or smallholders. It also offers a fixed cash aid of RM200 per month to qualified applicants who meet these requirements:

  1. Must be registered as a farmer, or a smallholder, with relevant agencies under the Ministry of Agriculture and Food Security (KPKM), or the Ministry of Plantation and Commodities (KPK).
  2. Must be an active farmer, or smallholder, with annual agricultural sales of between RM50,000 and RM300,000.

MySubsidi Diesel

Finally, the MySubsidi Diesel is a special category for public vehicles and qualified goods transportation, which will be able to obtain subsidised diesel through a “fleet card”.

This includes 10 types of public transport vehicles, and 23 types of goods transport vehicles under the Subsidised Diesel Control System, including buses and taxis.

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BUDI MADANI Diesel Subsidy Scheme Explained!


BUDI MADANI : How To Apply + Get Aid / Subsidy

You can apply for any of the three BUDI MADANI categories through the official BUDI MADANI website.

BUDI Individu and BUDI Agri-Komoditi applicants who are approved before 3 June 2024 will receive their first cash aid by middle of June 2024, and thereafter receive it on a monthly basis.

Those who get approved after 3 June 2024 will receive the first BUDI MADANI payment within two weeks, and thereafter receive it on a monthly basis.

Cash aid through the BUDI MADANI programme will be credited directly into the recipient’s bank account every month. Those who do not have a bank account can claim their BUDI MADANI aid as cash at any Bank Simpanan National (BSN) branch nationwide.

For those whose applications failed, the Ministry of Finance will also open up an Appeals process to allow you to make an appeal.

BUDI MADANI Diesel Subsidy Scheme Explained!


Diesel Subsidy : Choose SKDS 2.0 / BUDI MADANI

On Thursday, 30 May 2024, Malaysia Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali clarified that people can only opt for one diesel subsidy – either the Subsidised Diesel Control System 2.0 (SKDS 2.0), or the new BUDI MADANI programme, but not both.

He explained that the Subsidised Diesel Control System is targeted at companies, while the BUDI MADANI is for individuals, and small farmers. The SKDS 2.0 programme is also handled by his ministry, whereas BUDI MADANI is being handled by the Finance Ministry instead.

They can only choose one. We observed that there are farmers or households that have small businesses and do not have a company. Hence, we will have to help them through the Budi Madani programme.

Further details on BUDI MADANI will be announced by the Finance Ministry, whereas our ministry handles the SKDS.


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