The Madani government’s much talked about targeted subsidy programme is here, with diesel fuel kicking things off before RON 95 petrol eventually comes onboard. Basically, fuel prices will no longer be at today’s low subsidised price at the pumps, but those deemed in need of assistance will be given direct cash transfers to offset the price increase.
That sum is RM200 per month, as announced by the finance ministry (MoF) yesterday. The Program Bantuan Subsidi Madani, or in short, Budi Madani, is for private owners of diesel vehicles and agriculture smallholders in Peninsular Malaysia. Sabah and Sarawak will continue to receive fuel subsidy at the pumps – no change for East Malaysia.
Applications are open today, May 28, and one can apply for Budi Madani subsidies under Budi Individu or Budi Agri-Komoditi categories for farmers (fleet owners have their own Sistem Kawalan Diesel Bersubsidi fleet card). The criteria for Budi Individual is that one must be a Malaysian citizen and an owner of a JPJ-registered diesel private vehicle.
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Said vehicle must not be a ‘luxury’ diesel vehicle below 10 years of age. The government is yet to spell out its classification of luxury, so we’ll see if high-end pick-up trucks are included. In any case, owners of such trucks will likely be over the RM100,000 annual income threshold (individuals and couples), and the government said that it will cross-check with LHDN on this. Finally, the diesel vehicle must have valid road tax.
The Budi Madani website is up and the main page greets you with a brief introduction of the programme and why it is needed. Scroll down and you’ll see three categories for applications – the above-mentioned MySubsidi Diesel (SKDS) fleet card, Budi Individu and Budi Agri-Komoditi.
We’ll focus on Budi Individu here. Log in using your IC number without dashes/space and you’ll be directed to a page to fill in all your personal details, as well as the details of the diesel-powered vehicle(s) that you own.
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What they need is your number plate, make and model of your vehicle, usage class and road tax expiry date. There are a couple of slots if you have more than one applicable vehicle – see the screenshot above. Of course, all the details that you input will be cross-checked with the relevant government agency, which in this case is the JPJ.
MoF says that those whose applications are approved before June 3 will receive their first Budi Madani payout by mid-June, and subsequent payments will be made monthly. For applications approved after June 3, one will receive his/her first payment within two weeks, and every month thereafter. The monthly sum will be transferred into the bank account that you stated in the application form. You can appeal your case if rejected – the website has a ‘rayuan’ section that will be active in mid-June.
It was not explicitly stated, but the fact that payouts will start as early as next month clearly means that pump prices for diesel in Peninsular Malaysia will be floated to market price very soon. As of today, unsubsidised Euro 5 diesel is selling for RM3.33 per litre – compared to the controlled price of RM2.15, that’s an increase of RM1.18 per litre, a 55% jump.
Here’s some back-of-the-envelope calculation. Using RM3.33 per litre as the market price, the Budi Madani RM200 payout will make up the price difference for up to 169.5 litres of diesel fuel a month.
If your truck is doing around 10 km/l, that works out to an average mileage of 1,700 km per month before the targeted subsidy runs out. Do more than that and you’ll pay the full price for diesel, just like the T20s in their Raptors (if that high-performance Ford Ranger is classified as luxury). However, diesel pump prices may be adjusted upwards in stages, as opposed to an overnight jump to market price.
For now, the majority of motorists in their petrol-powered cars will sit and observe, but it surely won’t be long till the government abolishes blanket subsidy for RON 95 fuel. When that happens, it’s logical that this direct cash transfer programme – currently ‘on trial’ with diesel – will be used. At the time of writing, non-subsidised RON 95 is priced at RM3.35 per litre – RM1.30 more than the controlled price of RM2.05, a 63% increase. Are you ready?
