Gov’t still paying RM10 bil in diesel subsidies – RM3.3 bil to maintain RM2.15 price in Sabah and Sarawak

Gov’t still paying RM10 bil in diesel subsidies – RM3.3 bil to maintain RM2.15 price in Sabah and Sarawak

The government says it is continuing to shoulder more than RM10 billion in diesel subsidies annually despite having carrying out its rationalisation of the fuel, which has seen its retail price climb to RM3.35 per litre.

According to the finance ministry, this was from subsidies offered through various avenues, the New Straits Times reports.These include RM1.8 billion being dispensed via the Budi Individu and Budi Agri-Komoditi cash assistance programmes, which provides RM200 monthly aid to eligible recipients in these categories.

Additionally, RM3.3 billion is allocated for diesel users in Sabah and Sarawak, while RM4 billion is provided for the public transport/logistic sectors, where diesel is priced at RM1.88 per litre for 10 types of public transport vehicles and RM2.15 per litre for 23 types of logistics vehicles under the subsidised diesel control system (SKDS) 1.0 and 2.0 schemes. Fishermen also continue to benefit from RM1.2 billion in subsidies, with diesel priced at RM1.65 per litre for them.

Gov’t still paying RM10 bil in diesel subsidies – RM3.3 bil to maintain RM2.15 price in Sabah and Sarawak

However, it said that the country’s operating expenses with regards to diesel subsidies had been lowered by RM4 billion from RM14 billion as a result of the switch to targeted subsidies. The ministry said this in a written reply to a question by Ahmad Fadhli Shaari (PN-Pasir Mas), who asked about the anticipated savings from the rationalisation of fuel subsidies.

Last year, Malaysia’s allocation for subsidies was around RM81 billion, and the bulk of it went to fuel subsidy to keep RON 95 at RM2.05 per litre and diesel at RM2.15 per litre. The government has said that the annual savings of around RM4 billion in the removal of blanket diesel subsidies will be used to improve the quality of life for the wider public through the provision of quality public transport infrastructure and more comprehensive social protection.

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