Malaysia is expanding its targeted diesel subsidy programme, bringing more small businesses under the scheme as part of the government’s efforts to make fuel subsidies more efficient and better targeted.

The nationwide rollout of the programme will begin on July 1 after a pilot phase conducted to test the system’s technical readiness and operational effectiveness.

Under the programme, eligible recipients will be able to purchase diesel at the subsidised price. Verification will be carried out using the national identity card or participating oil companies’ digital applications.

The government said extensive preparations have been made to ensure the subsidy process is simple, secure and seamless for the public. Ten oil companies and more than 4,000 fuel stations across the country are ready to implement the programme.

Under the revised policy, certain diesel-powered sports utility vehicles (SUVs), four-wheel drives and pickup trucks registered under businesses or companies will also qualify for the subsidy. Previously, the benefit was largely limited to privately owned vehicles or specific transport sectors.

The government said the move is expected to help reduce operating costs for small businesses.

Meanwhile, diesel quota allocations for commercial goods vehicles will also be revised. Instead of relying solely on vehicle type, the new system will consider factors such as vehicle weight, engine capacity, fuel consumption patterns and operational methods.

According to the government, the changes are aimed at reducing subsidy leakages while ensuring assistance reaches genuine beneficiaries more effectively.

The reform is part of Malaysia’s broader strategy to contain the cost of living, improve transparency in the subsidy system and ensure government spending remains fiscally sustainable.