PADU: The Data Engine Behind Malaysia's Subsidy Rationalisation

For years, the Malaysian government subsidised fuel, electricity and food for everyone in bulk — regardless of whether the recipient was a rubber tapper or the owner of a luxury car. The question that changed everything was not how much subsidy was given, but to whom. And to answer it, the government needed something it had never had: an accurate picture of who Malaysians actually are. That is PADU’s job.

What is PADU and why was it built?

PADU, short for Pangkalan Data Utama, was launched by Prime Minister Datuk Seri Anwar Ibrahim on 2 January 2024 in Putrajaya. It is a central database that combines the individual and household profiles of citizens and permanent residents into a single reference.

Each profile contains demographic information, locality, socioeconomic status, employment, income, education, vehicle ownership, poverty status and the type of aid currently received. Building it involved cooperation between the Ministry of Economy, the Department of Statistics Malaysia (DOSM) and MAMPU, with data drawn from various government agencies.

It is important to understand: PADU is not a pricing mechanism. It does not set how many sen per litre fuel costs at the pump. Its function is more fundamental — it answers the question “who qualifies?” so that subsidies can be shifted in a targeted way. This is why PADU is often described as the data engine behind subsidy rationalisation, rather than subsidy rationalisation itself.

According to the then Economy Minister, Rafizi Ramli, the implementation of targeted subsidies was expected to help the government reach its goal of shrinking the fiscal deficit to between 3% and 3.5% of Gross Domestic Product (GDP) by 2025. In other words, PADU was designed as a fiscal-policy support tool — not merely a registration project.

How does PADU unify scattered subsidy programmes?

Before PADU, Malaysia’s subsidies operated as separate silos: fuel subsidies were managed separately from electricity subsidies, which in turn were separate from cash aid. PADU offered something different — a single data backbone that every programme can refer to.

As of August 2025, 204 government agencies had integrated their data with PADU, and the database held about 30.4 million individual profiles. Second Finance Minister Datuk Seri Amir Hamzah Azizan described the intention to use PADU data for the RON95 subsidy mechanism as the first detailed use of the database — although the extent to which PADU is used in actual implementation still needs to be refined.

The intended effect is a shift in mindset: from several unconnected rationalisation steps, to a single, data-driven national targeting programme.

How much has been saved so far?

The most mature part of the rationalisation is diesel. Under the BUDI MADANI Diesel programme that began on 10 June 2024, the government estimates savings of around RM5 billion a year. Money that the government previously considered leaking to smugglers and well-off commercial users is now redirected to the social safety net and development projects.

But rationalisation does not mean everyone loses aid. Instead, subsidies are redistributed in a targeted way. The table below shows how those savings turned into more focused assistance.

Programme (under BUDI MADANI)	Target recipients	Details / price
BUDI Individu (diesel)	140,000+ approved recipients	RM430 million in payments
BUDI Agri-Komoditi (diesel)	180,000+ approved recipients	RM350 million in payments
BUDI MySubsidi Diesel (fleet card)	121,618 companies (as of 30 Sept 2025)	Diesel at RM2.15 per litre
BUDI95 (RON95)	12.4 million people out of 16.5 million eligible	RON95 at RM1.99 per litre

For RON95, the BUDI95 initiative began in September 2025. As of 21 October 2025, more than 12.4 million people had enjoyed the subsidised price of RM1.99 per litre, involving sales exceeding RM1.85 billion or consumption of more than 930 million litres.

At the same time, cash aid was strengthened. The allocation for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) was raised to RM13 billion in Budget 2025, up from RM10 billion previously. This is the core logic of targeted rationalisation: reduce bulk subsidies, thicken direct aid to those who need it.

Who is excluded?

This is where the targeting design is tested. Rather than relying entirely on the old B40/M40/T20 labels, the government intends to use finer criteria — number of dependants, household size, cost of living by region, commuting distance and asset ownership — with PADU as the data source.

But at the launch of BUDI95 (30 September 2025), the dividing line used was simpler: citizenship and personal use. All Malaysian citizens holding a MyKad and a valid driving licence qualify for the RM1.99 per litre price — an estimated 16 million-plus people. Foreigners and companies are excluded and pay the unsubsidised price of around RM2.60 per litre; Transport Minister Anthony Loke cited around 878,279 foreigners holding Malaysian driving licences who are no longer eligible. The proposal to exclude the high-income group (T15) was set aside for the time being at launch, pending resolution of the T15 definition.

For electricity, a similar targeting principle applies through the new tariff structure that takes effect from 1 July 2025 to 31 December 2027 in Peninsular Malaysia. About 23 million users are assured of being unaffected by the restructuring, and users of 600 kWh and below enjoy an exemption from the RM10 monthly retail charge. The average rate stands at around 44.5 sen/kWh before tax and adjustments. Again, subsidies are not abolished — they are restructured so that households using the most energy pay a higher rate.

Does PADU solve the problem — or create new ones?

PADU is not without controversy. Early registration was slow: by the end of January 2024, fewer than 5% of adults aged 18 and above had registered, far short of the target of 29 million by the end of March 2024. By November 2024, the then Economy Minister, Rafizi Ramli, was reported to have said that about 55% of households had registered in the first phase, the majority from lower-income groups.

That pattern itself reveals the challenge: those most likely to be excluded from subsidies — the high-income group — are the least motivated to update their profiles. Data quality, privacy and targeting accuracy remain issues closely monitored by policy analysts.

From a fiscal standpoint, the aim of this policy is to ensure that every ringgit of subsidy is channelled to the target group. Money that no longer flows to untargeted recipients can be redirected to direct aid, the safety net or debt repayment. PADU is designed as a tool intended to make that shift feasible on a national scale — although its effectiveness depends on the quality and coverage of its data.

What comes next

Watch three things. First, whether and how an income-based targeted RON95 mechanism is ultimately implemented — including how the income threshold translates into the actual experience at the pump and the appeals process for those who are wrongly classified. Second, the extent of the actual RON95 savings (after accounting for expanded cash transfers) compared with the proven diesel savings. Third, the governance of PADU’s own data — who can access those 30.4 million profiles and how their accuracy is maintained over time.

To check your status or update your profile, visit the official PADU portal at padu.gov.my. To understand the pump-pricing mechanics that are separate from this eligibility filtering, refer to the BUDI MADANI fuel subsidy guide.