Prime minister Datuk Seri Anwar Ibrahim has revealed the government still bears around RM7 billion in subsidies related to diesel in Peninsular Malaysia despite the fuel subsidy rationalisation programme coming into effect on June 10 this year.
As reported by Bernama, Anwar said subsidies have not been abolished and that the programme serves to better manage subsidies, prevent misuse and ensure subsidies reach appropriate groups.
“The main goal of the diesel subsidy rationalisation policy is to ensure that subsidy wastage no longer continues while ensuring that the savings are returned to the wider population,” he said. Savings from the implementation of targeted subsidies would be used to improve education, health, public transportation and other sectors that benefit the public.
According to another report by Reuters, prior to the programme being implemented, Malaysia’s diesel subsidy bill has risen by 10 times from RM1.4 billion in 2019 to RM14.3 billion in 2023.
Another purpose of the programme is to counter diesel smuggling, with the prime minister saying a total of 6.44 million litres of diesel, which is estimated to worth RM14.12 million, have been seized as of December 31, 2023 following the launch of Ops Tiris on March 1, 2023 by the ministry of domestic trade and costs of living (KPDN).
The price of Euro 5 B10 and B20 diesel is currently at RM3.35 per litre following the automatic pricing mechanism (APM) formula. Subsidies (that the government is paying for) are still provided for eligible sectors, including fisherman and those that qualify for the Subsidised Diesel Control System (SKDS).
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