Diesel subsidy scheme offers RM200 per month to diesel owners – pump price will soon go up to RM3.33/litre

Ministry of Finance (MOF) Malaysia has announced Madani subsidy support program, or Budi Madani, is available to private owners of diesel vehicles and small agricultural producers in Peninsular Malaysia.

Applications will open tomorrow, May 28, 2024 for eligible individuals, who can apply for the Budi Madani subsidy under the Budi Personal and Budi Agri-Commodity categories. Successful applicants in both categories will receive a monthly financial support of RM200 as part of the program. Targeted subsidy program for dieselMinistry statement.

The eligibility criteria of Individual Budi applicants are as follows:

• Malaysian nationality
• Owners of JPJ-registered diesel personal vehicles, excluding luxury diesel vehicles under 10 years old
• The vehicle has a valid road tax
• Annual income of RM100,000 or less (individuals and couples)

Criteria to qualify for Budi Agri-Commodity registration are as follows:

• Farmers or smallholders registered with relevant agencies under the Ministry of Agriculture and Food Security (KPKM) or the Ministry of Crop Production and Commodities (KPK)
• Can demonstrate annual revenue between RM50,000 and RM300,000 from agricultural or commodity production

Applications can be made online at Budi Madani website, will be online throughout the year, according to the Treasury Department. Applicants whose applications have been approved before June 3, 2024 will receive their first Budi Madani payment by mid-June 2024, and subsequent payments will be made monthly.

For applications approved after June 3, 2024, successful applicants will receive their first payment within two weeks and monthly thereafter. The monthly amount will be transferred to the bank account of your choice or in cash from any BSN branch for successful applicants without a bank account.

Although not explicitly spelled out, the fact that payments will begin as early as June 2024 clearly means that station pump prices for diesel fuel in Peninsular Malaysia will soon be market. As of today, unsubsidized Euro 5 diesel is priced at RM3.33 per litre, compared to the controlled price of RM2.15. That’s an increase of RM1.18 per liter, or 55%!

Using these numbers, a payment of RM200 would cover the price difference for up to 169.5 liters of diesel fuel per month. For a diesel car that gets around 10 km/L (diesel vehicles are mostly large and heavy), that works out to an average mileage of just 1,700 km per month. , before the “subsidy” ends. Any more and you’ll burn more fuel than you do now.

This monthly cash transfer program will likely also extend to gasoline users when the government decides to remove the subsidy on RON 95 fuel. At the time of writing, unsubsidized RON 95 costs 3 RM.35/liter – RM1.30 more than the current controlled price of RM2.05 or a 63% increase. Get ready everyone!

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