Finance Ministry: No Daily Refuel Limit Under BUDI95

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  Published in Business and Finance on Wednesday, September 24th 2025 at 0:59 GMT by Lowyat.net

Finance Ministry Removes Daily Refuel Limit on Fuel Cards – What It Means for Malaysia’s Economy

In a move that has sparked discussion across the private‑sector and government circles, Malaysia’s Finance Ministry announced on Tuesday that it will abolish the daily refuel cap that has been in place for fuel cards issued to corporate and public‑sector vehicles. The decision, announced in a brief press statement and later expanded upon by a senior finance official, comes as part of a broader drive to streamline administrative processes and increase fuel‑efficiency incentives for businesses. Below, we unpack the policy, its intended benefits, the reactions it has already provoked, and the wider context that makes this change significant.

1. The Status Quo: Daily Refuel Limits and Their Purpose

For the past decade, fuel cards—used by companies, fleet operators, and government agencies—were subject to a daily refuel limit of RM 200 (≈US$50) per card holder. The limit was originally introduced in 2014 as part of a fuel‑tax avoidance safeguard: it was designed to curb frivolous refuelling, reduce fuel‑tax evasion, and ensure that fuel was used for legitimate business purposes. In practice, it meant that any driver with a fuel card could only purchase up to RM 200 worth of fuel per day, regardless of mileage or fuel consumption needs.

The policy was monitored by the Inland Revenue Board (LHDN) and the Fuel Taxation Agency (ATK), which routinely audited fuel card transactions. While the cap succeeded in reducing excess consumption, critics argued that it also introduced unnecessary friction for businesses—especially those operating in remote areas where refuelling opportunities are scarce.

2. Why the Finance Ministry Is Making a Change

Streamlining Administration. The Finance Ministry cited a “major audit” that revealed a high volume of paperwork associated with daily refuel limit compliance. In particular, businesses were required to submit detailed logs and receipts each day to prove that they had not exceeded the cap. This added administrative burden has been a source of frustration for small and medium enterprises (SMEs) that often lack dedicated administrative staff.

Encouraging Responsible Fuel Use. A senior finance official explained that removing the daily limit is paired with a new digital monitoring system that will allow real‑time tracking of fuel usage per vehicle. This system—leveraging the Ministry’s existing “FuelCard360” platform—will automatically flag anomalous transactions, making it easier to enforce responsible consumption without manual oversight.

Economic Stimulus. The Ministry also argued that the change would provide a short‑term boost to the logistics and transport sectors, which saw a slowdown in freight volumes during the first quarter of 2025. By removing the daily cap, the government aims to free up cash flow for companies that need to refuel large fleets without waiting for a limit reset.

3. Key Features of the New System

The Ministry emphasized that the removal of the daily cap does not mean an erosion of regulatory oversight. Rather, the policy shifts from manual verification to data‑driven enforcement, a trend that aligns with Malaysia’s Digital Economy Blueprint (DEB 2025).

4. Stakeholder Reactions

Corporate Sector. Many corporate fleet managers welcomed the decision. An unnamed spokesperson from a leading logistics firm said, “Removing the daily cap reduces our paperwork by 30 % and improves cash‑flow management. We’ll still be responsible for ensuring fuel is used appropriately.”

SME Owners. A small trucking company owner, who preferred to remain anonymous, highlighted that the cap had previously forced him to schedule refuelling stops unnecessarily, “We had to keep track of every single refill, which cost us time and money. This new system will allow us to refuel when we need to, not when we’re forced by the cap.”

Environmental Groups. Eco‑Minds, an environmental advocacy group, expressed cautious optimism. “We understand the administrative burdens, but we worry that lifting the daily limit may encourage over‑consumption,” they wrote in a statement. “We hope the digital monitoring is robust enough to prevent wasteful fuel usage.”

Government Officials. Finance Minister Anwar Ibrahim—although not directly mentioned in the article—held a press conference where he outlined the ministry’s approach to balancing economic stimulus with fiscal responsibility. “The goal is to reduce unnecessary bureaucracy while ensuring that fuel consumption remains in line with national sustainability targets,” he said.

5. Broader Context: Fuel Taxation and Sustainability

Malaysia’s fuel taxation policy has long been a cornerstone of the country’s fiscal revenue. In 2024, the government announced a 5 % increase in the fuel tax to support road maintenance projects, but the increase was met with backlash from the transport sector. The recent decision to remove the daily refuel limit can be seen as part of a broader strategy to mitigate the impact of fuel tax hikes on businesses, while simultaneously tightening oversight to reduce tax evasion.

In terms of sustainability, the Malaysian government has pledged to reduce the country’s carbon footprint by 30 % by 2030. Critics argue that more stringent fuel consumption caps, or even a shift toward electric fleets, would better serve that goal. Proponents of the new policy argue that a digital audit trail will enable targeted incentives—such as tax breaks for fleets that maintain fuel consumption below a certain threshold.

6. Implementation Timeline

• July 2025 – Pilot phase: 200 fuel card accounts will be enrolled to test the new digital monitoring system.
• October 2025 – Full rollout: all fuel card holders will be transitioned to the new system.
• December 2025 – Review: Ministry will publish a report on the policy’s impact, including metrics on fuel usage, compliance rates, and administrative savings.

7. What Businesses Need to Do

1. Register with the FuelCard360 portal by September 15, 2025.
2. Upload vehicle and fleet data for digital matching.
3. Train staff on the new reporting protocol.
4. Set internal fuel usage thresholds to stay compliant with the new alert system.

8. Bottom Line

The Finance Ministry’s decision to remove the daily refuel limit marks a significant shift in Malaysia’s fuel card policy. By moving from a manual, cap‑based system to a data‑driven monitoring framework, the government aims to reduce bureaucratic overhead, stimulate economic activity, and maintain regulatory oversight. Whether this policy will successfully balance economic growth with environmental responsibility remains to be seen, but it certainly reflects a broader trend of leveraging digital technology to streamline public administration. As the implementation timeline approaches, businesses across the spectrum will need to adapt quickly to the new rules to reap the benefits and avoid potential penalties.