The ministry of finance (MOF) of Malaysia has announced the Madani subsidy assistance programme, or Budi Madani for private owners of diesel vehicles and agriculture smallholders in Peninsular Malaysia.
Applications open tomorrow, May 28, 2024 for eligible individuals, who may apply for Budi Madani subsidies under Budi Individual and Budi Agri-Commodity categories. Successful applicants in both categories will receive a RM200 monthly sum in financial assistance as part of the targeted subsidy programme for diesel, the ministry stated.
Criteria for Budi Individual applicant eligibility are as follows:
- Malaysian citizenship
- Owner of a JPJ-registered diesel private vehicle, except luxury diesel vehicles less than 10 years of age
- Vehicle has valid road tax
- Annual income of RM100,000 and under (individuals and couples)
Criteria for Budi Agri-Commodity applicant eligibility are as follows:
- Registered farmer or smallholder with relevant agencies under the ministry of agriculture and food security (KPKM) or the ministry of plantation and commodities (KPK)
- Able to demonstrate annual turnover of between RM50,000 and RM300,000 from farming or commodity production
Applications can be made online at the Budi Madani website, which will be online throughout the year, according to the ministry of finance. Applicants who have had their applications approved before June 3, 2024 will receive their first Budi Madani payout 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 every month thereafter. The monthly sum will be transferred into the bank account of your choice, or in cash from any BSN branch for successful applicants without a bank account.
While it’s not explicitly written, the fact that payouts will start as early as June 2024 clearly means that the in-station pump prices for diesel fuel in Peninsular Malaysia will be floated to market prices very soon. As of today, unsubsidised diesel Euro 5 is priced at RM3.33 per litre, compared to the controlled price of RM2.15. That’s an increase of RM1.18 per litre, or 55%!
Using these numbers, the RM200 payout will make up the price difference for up to 169.5 litres of diesel fuel each month. For a diesel car doing 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” runs out. Any more, and you’ll be spending more on fuel than you do now.
This monthly cash transfer programme will likely extend to petrol users too, as and when the government decides to lift subsidies on RON 95 fuel. At the time of writing, non-subsidised RON 95 is priced at RM3.35 per litre – RM1.30 more than the current controlled price of RM2.05, or a 63% increase. Get ready, everyone!
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