Understanding Diesel Subsidy Reform (June 2024)
On June 10, 2024, the Malaysian government implemented a historic change to diesel pricing. The price jumped from RM2.15 to RM3.35 per litre in Peninsular Malaysiaβan increase of RM1.20 per litre (55.8% increase).
For container hauliers, this was devastating:
- Fuel represents 30-40% of operating costs for haulage businesses
- Prime movers consume significant dieselβaveraging 35L per 100km
- Daily operations became much more expensive overnight
- Profit margins were severely squeezed for many hauliers
The government cited RM14.3 billion in diesel subsidy costs for 2023 as the reason for reform, targeting leakages and ensuring subsidies reach intended recipients.
What is SKDS 2.0?
The Subsidised Diesel Control System (SKDS) 2.0 is the government's solution to help commercial logistics vehicles manage diesel costs. Under this program:
SKDS 2.0 Key Benefits
- Fleet cards for eligible vehicles
- RM2.15 per litre (same as pre-reform price)
- Save RM1.20 per litre compared to market price
- 23 categories of goods transport vehicles covered
- Prime movers, container lorries, trailers all eligible
Calculating Your Annual Savings
Let's break down the actual savings for a typical prime mover operation:
Prime Mover Fuel Savings Example
- Average fuel consumption: 35L per 100km
- Daily distance: 40 km (Port Klang operations)
- Daily fuel use: 14 litres
- Daily savings: 14L Γ RM1.20 = RM16.80
- Monthly savings: RM16.80 Γ 26 days = RM437
- Annual savings: RM437 Γ 12 months = RM5,244
Note: Actual savings vary based on distance, fuel efficiency, and operations. Long-distance prime movers can save up to RM21,000 annually.
How to Apply for SKDS 2.0 Fleet Cards
Prepare Required Documents
Company registration (SSM Form 9 & 24/49), vehicle registration cards, APAD permits, proof of logistics operations (invoices, delivery orders).
Submit Application to Ministry of Finance
Apply through the Subsidised Diesel Control System online portal or visit the Ministry of Finance office. Ensure all vehicle details are accurate.
Wait for Approval (2-4 Weeks)
Processing time varies. Ensure your contact information is current for follow-up communications regarding your application status.
Receive Fleet Cards
Once approved, you'll receive fleet cards for each eligible vehicle. Use these cards at subsidised diesel pumps to purchase fuel at RM2.15 per litre.
Subsidy Rate Comparison
| Category | Rate Per Litre | Difference from Market |
|---|---|---|
| Market Price (Unsubsidised) | RM3.35 | - |
| SKDS 2.0 (Commercial Logistics) | RM2.15 | Save RM1.20 |
| SKDS 1.0 (Public Transport) | RM1.88 | Save RM1.47 |
| Fishermen | RM1.65 | Save RM1.70 |
Prime Mover Financing While Awaiting SKDS 2.0
Don't delay your fleet expansion while waiting for SKDS 2.0 approval. Ing Heng Credit provides prime mover financing with:
- 0% down payment - Preserve cash for operations
- 24-hour approval - Don't miss business opportunities
- Up to 7 years tenure - Manageable monthly payments
- Rates from 2.88% p.a. - Competitive flat rates
Once your SKDS 2.0 fleet cards are approved, your reduced diesel costs will improve your cash flow, making loan repayments even more manageable.
Frequently Asked Questions
What is SKDS 2.0 diesel subsidy for prime movers?
SKDS 2.0 is a government subsidy program for commercial logistics vehicles including prime movers and container lorries. Eligible vehicles receive fleet cards allowing them to purchase diesel at RM2.15 per litre instead of the market rate of RM3.35, saving RM1.20 per litre.
How do I apply for SKDS 2.0 fleet cards for my prime movers?
Apply through the Ministry of Finance's Subsidised Diesel Control System. You'll need company registration (SSM), vehicle registration documents, APAD permits, and proof of logistics operations. The process takes 2-4 weeks for approval.
Can I get prime mover financing while applying for SKDS 2.0?
Yes! Ing Heng Credit provides prime mover financing regardless of your SKDS 2.0 status. We can even help you plan your cash flow to account for diesel savings once your fleet cards are approved.
How much can I save with SKDS 2.0 diesel subsidy?
With diesel at RM2.15 vs market price RM3.35, you save RM1.20 per litre. For a prime mover averaging 40 km daily at 35L/100km, that's approximately RM1,750 per month or RM21,000 annually in fuel cost savings.
What vehicles are eligible for SKDS 2.0 subsidy?
SKDS 2.0 covers 23 categories of goods transport including prime movers, container lorries, trailers, and various truck types. All vehicles must be registered for commercial logistics use and have valid APAD permits.