Kuala lumpur: The actual expenditure on diesel subsidies decreased to RM6.2 billion in 2025 compared to RM10.1 billion in 2024, resulting in savings of about RM4 billion.
According to BERNAMA News Agency, the Ministry of Finance (MoF) stated that these savings were achieved through the retargeting of diesel subsidies in Peninsular Malaysia via the Subsidised Diesel Control System (SKDS 2.0), which was implemented from June 10, 2024, until December 31, 2025. This retargeting successfully reduced leakages due to smuggling and the usage of diesel by ineligible business sectors, as reflected in the reduction of retail diesel purchases at petrol stations to four billion litres in 2025 compared to seven billion litres in 2024.
The MoF provided this information in a written reply to the Dewan Rakyat, responding to a question from Ahmad Fadhli Shaari (PN-Pasir Mas) regarding the savings generated from subsidy rationalisation, including fuel and targeted assistance, and how these funds were redistributed to the people. The ministry explained that the savings from subsidies were redirected to those in need and used for socio-economic development and to strengthen a more inclusive social protection network.
Initiatives funded by the savings include the Sumbangan Tunai Rahmah (STR), Sumbangan Asas Rahmah (SARA), which represents the highest allocation ever provided compared to RM8 billion in 2022, and the Early Schooling Assistance Programme (BAP) amounting to nearly RM800 million. Additionally, over 141,000 companies, involving a total of 368,000 vehicles, have benefitted from the MySubsidi Diesel Programme through SKDS since its launch from June 2024 until January 2026.
For recipients of the BUDI Individu and Budi Agri-Komoditi cash assistance, a total of 344,817 recipients have received distributions amounting to RM1.05 billion. The MoF noted that maintaining subsidised diesel prices for logistics and public transport vehicles is a strategic step to ensure supply chain costs remain stable.
The ministry was responding to another question from Datuk Dr Ahmad Marzuk Shaary (PAS-Pengkalan Chepa) about the impact of diesel subsidy retargeting on transportation costs and food prices, including periodic review mechanisms and targeted compensation to ensure that increased costs are not passed on to consumers.