One cannot give a blanket ruling to the effect that all diabetic people must skip fasting and only need to offer fidyah (compensation).
This is because each diabetic person is different from the other in the way he or she reacts to fasting.
If we find one diabetic person is adversely affected by fasting, we also find another, in spite of being a diabetic, not at all troubled by fasting.
This being the case, one should never assume that all diabetic people are generally exempt from fasting.
If a diabetic person has been advised by a reliable physician not to fast, or, if after monitoring his/her sugar level, it has been established that he/she is adversely affected by fasting, then he/she is exempt from fasting and should give fidyah instead.
If, on the other hand, it was found that he/she is not adversely affected by fasting, then he/she must fast, and offering fidyah is not an option in his/her case.
In other words, exemption from fasting is granted only to those who are adversely affected by fasting.
Almighty Allah knows best.