Diesel subsidies to be rationalised in phases

BUDGET 2024 | Diesel subsidies will be rationalised in phases under Budget 2024 to handle the issue of leakages while still reducing the impact of rising costs for the rakyat.

Prime Minister Anwar Ibrahim said selected consumers such as cargo transport companies will still enjoy subsidised diesel prices while other users will be charged a higher price.

“In order to avoid leakage and smuggling, the government intends to rationalise the diesel subsidies in phases.

“With this approach, it can reduce subsidy leakage and at the same time, reduce the impact on the price of goods for the people,” he said while tabling Budget 2024 in the Dewan Rakyat today.

He explained that the current subsidised price for diesel is set at RM2.15 per litre while the market price is RM3.75 per litre.

Consumption data shows that subsidised diesel sales have increased up to 40 percent since 2019 but the number of vehicles using diesel has only increased by less than three percent.

“This means there is a possibility of serious smuggling activities due to the price of Malaysian diesel being too cheap,” Anwar said.

The government will also maintain diesel subsidies at the lowest price of RM1.65 per litre for certain categories of fisherfolk with a quota of 840 million litres a year, he added.

This move appears to be part of the Madani government’s commitment towards introducing targeted subsidies.

It was previously reported that the government will implement targeted subsidies for diesel starting next year.

Earlier this year, related ministries had looked into reports on diesel subsidy leakages allegedly amounting to almost RM10 billion.

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