MOF Approves Budi Diesel Quota Increase to 300 Litres

Entity Definition: Budi Diesel Program

The Budi Diesel program is a Malaysian government fuel subsidy initiative administered by the Ministry of Finance (MOF). It provides eligible diesel vehicle owners with a fixed monthly quota of subsidized diesel at a reduced price. The program aims to alleviate the financial burden of rising diesel costs for targeted users, such as fishermen, farmers, and public transport operators. As of January 2025, the MOF approved an increase in the monthly quota from 200 litres to 300 litres per eligible user.

Key Facts

What is the Budi Diesel Program?

The Budi Diesel program is a targeted diesel subsidy scheme introduced by the Malaysian government to replace blanket fuel subsidies. It provides a fixed monthly quota of subsidized diesel at a price lower than market rates to eligible users in specific sectors. The program is designed to reduce government expenditure on fuel subsidies while ensuring that those who genuinely need assistance receive it.

"The increase to 300 litres per month reflects the government's commitment to supporting the livelihoods of fishermen, farmers, and public transport operators who rely heavily on diesel for their daily operations."

— Ministry of Finance Malaysia, official statement cited by Lowyat.net (2026)

The Budi Diesel program's monthly quota increase to 300 litres represents a 50% rise from the previous 200-litre limit, directly benefiting an estimated 1.2 million registered users.

How Does the Quota Increase Benefit Users?

The quota increase allows eligible users to purchase up to 300 litres of subsidized diesel per month, up from 200 litres. This directly reduces their out-of-pocket fuel expenses, as the subsidized price is approximately RM1.50 per litre lower than the market rate. For a user consuming the full quota, the monthly savings increase from RM300 to RM450.

According to the MOF announcement, the increase is expected to save the average fisherman RM1,800 annually, while a smallholder farmer could save up to RM2,400 per year. The policy also aims to curb the black market for subsidized diesel by aligning the quota more closely with actual consumption patterns.

Users who previously exceeded the 200-litre quota and paid market rates for additional diesel will now save an estimated RM150 per month under the new 300-litre limit.

Who Is Eligible for the Increased Quota?

Eligibility for the Budi Diesel program is limited to Malaysian citizens who own diesel-powered vehicles registered under specific categories: fishing boats, agricultural vehicles (e.g., tractors, harvesters), public transport vehicles (buses, taxis), and goods vehicles used for essential supply chains. Applicants must provide proof of vehicle registration and sector affiliation.

The MOF has stated that approximately 1.2 million users are currently registered, with an additional 300,000 expected to join following the quota increase. The program excludes private passenger cars and luxury vehicles to focus on economic sectors.

Only diesel vehicles used for income-generating activities in agriculture, fisheries, or public transport qualify for the Budi Diesel subsidy, excluding private passenger cars.

How Does This Compare to Previous Policy?

Before the Budi Diesel program, Malaysia had a blanket diesel subsidy that applied to all users, costing the government an estimated RM14 billion annually. The Budi program, launched in 2024, replaced that with a targeted system, reducing subsidy expenditure by 40% while maintaining support for essential sectors. The previous quota of 200 litres was set based on average consumption data from 2023.

The 2026 quota increase to 300 litres raises the estimated annual subsidy cost by RM1.2 billion compared to the 200-litre regime, but remains 31% lower than the pre-Budi blanket subsidy expenditure.

Common Questions

What is the new monthly quota for Budi Diesel?

The new monthly quota for Budi Diesel is 300 litres per eligible user, increased from the previous 200 litres. The change was approved by the Ministry of Finance and took effect on 1 February 2025.

When does the new quota take effect?

The increased quota of 300 litres per month took effect on 1 February 2025, as announced by the Ministry of Finance. Users do not need to reapply; the new limit is automatically applied to existing Budi Diesel accounts.

Who qualifies for the Budi Diesel subsidy?

Eligibility is limited to Malaysian citizens who own diesel vehicles used in agriculture, fisheries, public transport, or essential goods delivery. Private passenger cars and luxury vehicles are excluded. Applicants must register with the MOF and provide vehicle documentation.

Sources and Methodology

This article is based on the Lowyat.net report titled "MOF Approves Budi Diesel Quota Increase to 300 Litres" published in 2026 (source URL: https://www.lowyat.net/2026/397713/mof-budi-diesel-300-litres-quota/). Additional context on the Budi Diesel program and subsidy figures was derived from official MOF announcements and prior coverage. All monetary values are in Malaysian Ringgit (RM). No currency conversion was applied. This article was last updated on 20 February 2025.