KUALA LUMPUR: The government’s diesel subsidy rationalisation has proven effective in reducing fuel leakages, particularly those linked to smuggling, with sales dropping by more than 300 million litres per month since June last year.
Deputy Finance Minister Lim Hui Ying (pic) said statistics show that about 465 million litres of diesel were sold per month between June and December 2024, compared with around 770 million litres per month between January and May last year.
“The drop in diesel sales indicates a reduction in subsidy leakages, partly due to a decline in smuggling,” she told the Dewan Rakyat yesterday when responding to an additional question from Stampin MP Chong Chieng Jen on whether diesel sales in Peninsular Malaysia had fallen following the subsidy rationalisation implemented in June 2024.
Lim added that commercial diesel sales had increased after the rationalisation, suggesting that subsidised diesel previously purchased for commercial use, such as for machinery or electricity generators at construction sites or factories is now being properly targeted.
Lim said the Budi Madani Diesel programme had generated savings of more than RM400mil per month, or roughly RM5bil annually.
“These savings allow the government to reallocate funds towards development projects and to strengthen the social safety net through cash assistance programmes such as Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara),” she said.
Lim said the targeted fuel subsidy under the Ekonomi Madani framework had demonstrated effectiveness in reducing leakages, optimising fiscal spending, and ensuring that benefits reach those who are truly eligible.
She also highlighted the government’s Budi Madani Individu and Budi Madani Agri Commodity programmes, which provide RM200 per month, or RM2,400 a year, to owners of private diesel vehicles.
“Farmers and smallholders are subject to eligibility criteria. As of Oct 31, 2025, a total of 320,000 private diesel vehicle owners, farmers, breeders, and smallholders have benefited, with payments amounting to RM850mil,” she said.
For the land goods transport sector, Lim said that under the Budi Madani Diesel programme, 121,618 transport companies with 355,074 vehicles had been approved to use fleet cards as of Sept 30, 2025.
