Corrupt officials and fuel smugglers have been targeted by the government as it struggles with a diesel shortage which has crippled transport, a minister said today.

The government was also taking measures to ensure adequate supplies within days and working on long-term plans to regulate the supply of the vital fuel, Domestic Trade and Consumer Affairs Minister Shafie Apdal said.

Shafie told reporters after a crisis meeting with Deputy Prime Minister Najib Razak that he could not reveal details of the long-term plan "but it involves subsidies and distribution", the official Bernama news agency reported.

Diesel in Malaysia is heavily subsidised at 88 sen a litre, tempting smugglers to sell it in neighbouring Thailand where it is more expensive, or pass it onto industrial users not entitled to the subsidy.

In an attempt to curb the smuggling, the government imposed a quota system for petrol stations which led to a crunch this week with school and commercial buses, trucks, taxis and even fishing vessel operators finding it difficult to get enough for their daily needs.

Backfired

Pan Malaysian Lorry Owners' Association President Er Sui See said the crisis had forced about 30 percent of the groups 10,000 members, owning some 100,000 lorries and trailers, to temporarily halt operations.

Faced with a growing outcry, the government this week ordered the oil companies to begin distributing June's quotas and Shafie acknowledged today there were weaknesses in the quota system.

Najib said after today's meeting that a suggestion to abolish the different pricing systems for commercial and industrial diesel users would be discussed by the cabinet soon, but the quota system would continue for the moment.

Blaming "irresponsible and greedy individuals" for the shortage, he said extra efforts would be made to ensure that those who illegally sold diesel would be punished.

The government paid out RM27 billion in diesel subsidies for the period of 2002 to 2004, of which RM14 billion was for last year alone, parliament was told.