KUALA LUMPUR — The government will lower the subsidised price of diesel to RM2.10 per litre nationwide starting July 2026, as part of a broader targeted subsidy reform, said Prime Minister Datuk Seri Anwar Ibrahim.
The initiative, implemented through an enhanced subsidy targeting mechanism using MyKad verification, aligns with the existing approach under the BUDI MADANI RON95 (BUDI95) programme, aimed at ensuring subsidies are channelled directly to eligible Malaysians.
“Tomorrow, Second Finance Minister Datuk Seri Amir Hamzah Azizan will provide an explanation on the implementation of the new subsidised diesel price to the media in Kuala Lumpur,” Anwar said, as reported by Bernama.
He said this during a cheque presentation ceremony held in conjunction with the change in status of Bintulu Port from a federal port to a state port earlier on Saturday.
Anwar, who is also the Finance Minister, said the Memorandum of Understanding (MoU) on the peace agreement between the United States (US) and Iran was among the factors contributing to the price decline even though the global economic situation remains uncertain.
“Today I announced the targeted subsidised diesel, not to increase but to decrease the price of diesel even though the situation is uncertain. So far, Pakistani Prime Minister Shehbaz Sharif, who has been coordinating much of the negotiations, told me that this time he is confident that the crisis in West Asia can be eased.
“So this will help us in terms of diesel prices,” he said.
The Prime Minister stressed that the targeted subsidised diesel using verification via MyKad is intended to prevent leakages that reach billions of ringgit, in addition to stepping up enforcement.
He also explained that the targeted subsidised diesel in the Peninsula was slightly delayed compared to Sabah and Sarawak, since both states recorded high diesel consumption.
“I regret the Members of Parliament in the Peninsula from the opposition, who criticised us saying that we have double standards, inconsistent policies, when we want to implement them and we look at the reality. It is one nation but the use is different.
“W have concerns, so we have to pay attention and refine so that the implementation does not burden the people,” he said.
Meanwhile, the Prime Minister said that apart from Brunei, the price of RON95 petrol in Malaysia is among the lowest in the world compared to other countries including Saudi Arabia and the United Arab Emirates (UAE) which have increased oil prices.
Meanwhile, in another development, Anwar said the close relationship between the federal government and the Sarawak Government was a key factor in the successful implementation of several strategic initiatives including the conversion of the status of Bintulu Port to a state port.
He said the cooperation established with Sarawak Premier Tan Sri Abang Johari Tun Openg enabled various issues that had been delayed for a long time to be resolved through negotiations and good understanding between both parties.
On Facebook, Anwar said the reduction in diesel prices will be implemented uniformly nationwide through the use of MyKad.
“At a time when the world continues to grapple with a global supply crisis, the MADANI Government has chosen to ensure that the returns from national reform, investment, and economic growth are passed back to the people through this reduction in subsidised diesel prices, while maintaining the price of RON95 at RM1.99 per litre,” he said.
In a separate statement, the Finance Ministry (MOF) confirmed that the new pricing mechanism will be standardised nationwide, with diesel subsidies distributed through MyKad verification.
“Diesel subsidies will be channelled directly to Malaysians through MyKad verification, while non-citizens and those not eligible will have to purchase diesel at the unsubsidised price,” it said.
The ministry said the reform is necessary amid ongoing geopolitical tensions in West Asia, which continue to put pressure on global oil supply, making it essential to ensure subsidies are directed only to Malaysians while reducing leakage and smuggling.
According to the MOF, the significant gap between subsidised and unsubsidised diesel prices has contributed to abuse and cross-border smuggling activities.
It noted that diesel is currently sold at RM2.15 per litre in Sabah and Sarawak, while the unsubsidised retail price in Peninsular Malaysia stands at RM4.37 per litre.
“With the diesel subsidy targeting reform, retail diesel prices in Sabah and Sarawak will be aligned with retail prices in Peninsular Malaysia, and non-citizens will no longer enjoy subsidies,” it said.
At the same time, Malaysians in Sabah and Sarawak with diesel vehicles will see the retail price reduced from RM2.15 to RM2.10 per litre.
Further details on implementation will be announced by Second Finance Minister Datuk Seri Amir Hamzah Azizan on Sunday.
The reform is part of the government’s broader targeted subsidy agenda, including initiatives such as BUDI MADANI RON95, a structured subsidy mechanism designed to ensure equitable distribution based on eligibility.