Explained: What does transferring BUDI Diesel eligibility to the actual user mean?

 An economist says the improvement helps genuine users, especially in Sabah and Sarawak, without reverting to blanket subsidies.

The BUDI Diesel programme now allows actual users, of eligible vehicles to benefit from subsidised fuel, even if they are not the registered owners’ family members.

PETALING JAYA:

The government now permits registered owners of private diesel vehicles to transfer their BUDI Diesel eligibility to actual users, including non‑family members.

Prime Minister Anwar Ibrahim announced the change on Sept 16 following feedback from diesel users, particularly in Sabah and Sarawak.

Previously, transfers were restricted to the immediate family members of a vehicle’s registered owner — namely the spouse, parents, children, or siblings.

FMT breaks down what has changed, who qualifies, and how to apply for subsidised diesel fuel.

What has changed?

Under the new rule, registered owners under BUDI Diesel may transfer subsidy eligibility to the actual user of a private diesel vehicle.

• Eligibility is now no longer tied to the vehicle’s registered owner. A recipient is eligible so long as they are the actual user and meets the conditions set.
• The transfer does not affect vehicle ownership; it only applies to subsidy eligibility.
• Using their MyKad, each approved recipient will be entitled to enjoy a personal monthly quota, independent of the registered owner.
• Eligibility is set at 300 litres per month for standard diesel vehicles, and up to 400 litres for pickups and jeeps approved for an additional 100 litres.
• The monthly quota may be used for subsidised RON95 petrol, subsidised diesel, or a combination of both, depending on the recipient’s eligibility.

Why is this important for Sabah and Sarawak?

In Sabah and Sarawak, diesel vehicles such as pickups and jeeps are often used for long-distance travel, agricultural work, transporting goods, obtaining basic necessities and providing informal transport to local communities.

Dependence is more pronounced in rural and interior areas as public transport is limited, settlements are scattered and districts lie far apart.

In many cases, vehicles are used by persons other than the registered owner through informal arrangements such as “sambung bayar”, where one person continues paying another’s monthly hire‑purchase loan instalments without the vehicle’s ownership being officially transferred.

Other informal arrangements include vehicles used while under company financing and those operated by individuals involved in rural work.

Economist Lai Wei Sieng said the rule change reduces the risk of genuine users being left out simply because vehicle ownership records do not reflect actual use.

“It has the potential to reduce the risk of ‘exclusion error’ in subsidy targeting.

“Transferring eligibility to the actual user can reduce the mismatch between vehicle ownership records and actual use,” he said.

Is the subsidy freely transferable?

Answer: No.

Eligibility transfers must be made through a formal application and are subject to cross‑checks against other relevant agency records before approval is granted.

This safeguard is necessary to prevent potential leakages and abuse of the subsidy, including practices such as quota rental or resale.

“The subsidy remains controlled or targeted, but the channel is corrected so that assistance reaches the actual user without opening too much room for abuse,” Lai said.

Who may receive the transfer?

To qualify, the recipient must be a Malaysian citizen, hold a valid MyKad, meet BUDI95 criteria, and personally use the designated diesel vehicle.

It is no longer limited to family members only.

Registered owners with more than one eligible diesel vehicle may submit new applications, subject to a maximum of three transfer recipients.

For example, if a registered owner has four eligible private diesel vehicles, and three are genuinely used by other individuals, the owner may apply to transfer eligibility for the three vehicles to their actual users.

The registered owner retains the monthly eligibility for any private diesel vehicle used personally.

The new rule applies when the vehicles are genuinely used by different individuals, allowing subsidy eligibility to follow the actual users instead of remaining tied to the registered owner.

Quota eligibility for each vehicle may only be transferred once, while each recipient may only receive a transfer from one registered owner.

How do users apply?

Applications may be made through the BUDI Madani portal. Users may log in using their MyDigital ID.

Alternatively, they can be made personally at any Inland Revenue Board (LHDN) office.

More information is available at petrol stations nationwide.

Registered owners of diesel pickups and jeeps that qualify for an additional quota of 100 litres per month must first apply to secure that quota before submitting an application to transfer eligibility to the actual user.

For the eligibility to be used on the first day of the following month, applications must be submitted no later than the 27th day of the current month.

All applications are subject to data checks and verification.

Eligibility transfers approved before the Sept 16 announcement remain valid.

What does this mean for subsidy policy?

Lai said the move reflects the government’s effort to improve targeted subsidies based on feedback from the ground. It also ensures the subsidy follows the actual user, without reopening blanket access to cheap diesel for all buyers.

He said the improvement could also help the government collect more accurate data on actual diesel consumption patterns, especially in Sabah and Sarawak. This would allow assistance to be channelled to those who truly need it, while curbing subsidy leakage or abuse. - FMT