Election gimmick.
One of the easiest gimmicks to scam voters to win elections is to create problems and then pretend to solve them, and voila, people would burst into tears in appreciation and gratitude. Taking away something before giving it back has been one of the oldest tricks used by many parents to handle misbehaving children or to get them to complete a specific task.
On Sunday (June 21), Prime Minister and Finance Minister Anwar Ibrahim announced that the government will lower the subsidised price of diesel for Malaysians to RM2.10 per litre from July 1, 2026. The move will be implemented through a restructured diesel subsidy mechanism using MyKad verification, just like how the RON95 petrol subsidy works currently.
That’s a spectacular U-turn from the same Prime Minister who cut diesel subsidies two years ago. Since June 2024, the price of diesel has been floated in Peninsular Malaysia, while East Malaysia still enjoys subsidies, as diesel-powered 4×4 vehicles are considered a necessity because of the rugged terrain there. In April, chaos erupted as diesel prices hit a new high of RM6.72 per litre in Peninsular Malaysia.
Anwar now brags that under the new approach, eligible Malaysians will continue to enjoy subsidised diesel at a standardised price nationwide, while non-citizens and ineligible users will be required to pay market-based rates without subsidies. Hilariously, he claims the reform is designed to ensure that fuel subsidies are delivered directly to Malaysians while reducing leakages and smuggling.
Exactly what type of reform he is trying to scam the voters when the same reasons – reduce leakages and smuggling – were used back in June 2024 to “cut diesel subsidies”, only to use it again now to “restore diesel subsidies”. The contradiction and inconsistency are jaw-dropping and breathtaking, to put it mildly. From the beginning, the PM had no idea what he was doing.
Diesel is currently sold at a subsidised price of RM2.15 per litre in the eastern states of Sabah and Sarawak, compared with RM4.37 in the Malaysian Peninsula. That alone speaks volumes about hypocrisy, double standards, discrimination and inconsistency. Under the new policy, motorists will pay less than half of the current Peninsular Malaysia rate.
The price gap between diesel sold in Sabah and Sarawak and that in Peninsular Malaysia has created room for revenue leakage and the smuggling of subsidised diesel, including across borders. But it took the genius PM Anwar Ibrahim two years to realise the problems, despite warnings, complaints and reports about the “loopholes”.
When the brilliant Madani Government first set the retail price for diesel fuel at RM3.35 per litre effective June 10, 2024, at all petrol stations across Peninsular Malaysia, Amir Hamzah Azizan, Finance Minister II, also announced fleet cards to eligible logistics vehicles to mitigate the impact of the diesel price on consumer goods prices, set at RM2.15 per litre.
At the same time, “BUDI Individu” cash assistance of RM200 per month was introduced for Malaysian individuals owning diesel vehicles to help offset the higher expenditure on fuel. Amir Hamzah argued that the government had to use the targeted approach to stem the rising leakages of subsidised diesel that have cost the nation RM14.3 billion on diesel subsidy a year earlier (2023).
So, does that mean the “targeted diesel subsidy” has failed after two years of disaster? If the implementation has been a huge success, why did Anwar suddenly announce the cut of diesel prices nationwide on Sunday, effectively restoring the diesel subsidies? Yes, call it whatever you like, but the clueless Finance Minister is actually restoring the diesel subsidies.
The snake oil salesman, however, has discovered an excellent excuse to spin and twist his latest U-turn. Anwar argues that the memorandum of understanding (MOU) on a peace agreement between the United States and Iran contributes to the decline in fuel prices. But the Iran War only began on February 28, 2026, whilst the “targeted diesel subsidy” already began on June 10, 2024.
What’s his perverted logic that diesel price was hiked RM3.35 per litre “before” the Iran War starts, but is now slashed to RM2.10 per litre even before the Iran War officially ends? Crucially, how does Madani plan to reduce the diesel subsidy, which amounted to RM14.3 billion in 2023, when Amir floated the price of diesel to align with market prices but is now being reversed by Anwar?
Interestingly, Finance Minister II Amir Hamzah – another snake oil salesman – said the new Budi Madani Diesel (Budi Diesel) programme is expected to generate savings of up to RM2 billion annually. But that’s only RM166 million monthly. Because he dares not use the “monthly figure”, he chose the yearly figures to trick the minds of the people about “billions” in savings rather than millions.
Prior to the conflict, the government spent about RM800 million a month on petrol and diesel subsidies. However, subsidy costs surged to nearly RM4.7 billion in March and RM4.9 billion in April this year following sharp increases in global oil prices due to the Iran War. This means the diesel subsidies have actually increased to the tune of billions, despite claims of RM2 billion yearly savings.
For obvious reasons, the finance ministry did not say how the government planned to finance the additional subsidy (with the price of diesel plunging from the current RM4.37 to RM2.10 per litre starting July 1), with public coffers already under strain from rising fuel costs stemming from the war in Iran. Amir was just playing with arithmetic figures to hoodwink gullible people.
More importantly, if indeed MyKad verification can prevent diesel leakages that reach billions of ringgit as claimed by Anwar, then why didn’t his government do it from the beginning, but wait till the Johor and Negeri Sembilan state elections were getting “too hot to handle” for Anwar-led Pakatan Harapan coalition? Clearly, the Premier is throwing everything, including the kitchen sink, in order not to lose the elections.
Even if the new Budi Madani Diesel could not be implemented in June 2024 for whatever excuses, surely it could be rolled out together with Budi Madani RON95 in September 2025. But it didn’t. Therefore, the new diesel subsidies have absolutely nothing to do with the MOU between the US and Iran, but everything to do with state elections and the 16th General Election.
Get real – if the MOU led to a permanent de-escalation, ending the conflict in the Middle East, the global energy prices would drop, and the Madani government could adjust the diesel price accordingly to align with market prices. Anwar did not need to artificially lower the price of diesel to RM2.10 per litre, but rather let the market force do its job. But the PM chickened out because he was terrified of something.
It appears the military intelligence or surveys landed on the desk of the Prime Minister’s Office (PMO) indicate a stunning defeat for his People’s Justice Party or Pakatan Harapan under his leadership. However, if Anwar could easily reintroduce diesel subsidies after scrapping it, what is there to stop him from cutting the subsidies again after winning the elections?
After taking away diesel subsidies from the people, the Premier is giving them back as he desperately needs something from them – votes. But the damage control may be too little too late. After phasing out other subsidies, such as electricity tariff adjustments and the removal of price controls for chickens, the diesel subsidy cuts had already led to widespread anger and dissatisfaction among the public and businesses. – Finance Twitter