Diesel subsidies at the pump to be removed starting Monday

Diesel prices at the pump across Peninsular Malaysia will no longer be subsidised once the clock strikes midnight and Monday, June 10, begins.

Sabah and Sarawak are not affected by the move.

Finance Minister II Amir Hamzah Azizan said the prices will be floated and follow the market rate - which is currently RM3.35 per litre.

The current price for diesel at the pump is RM2.15 per litre, RM1.20 less than the market rate.

The price will be updated weekly, the same as RON97 petrol.

“With a better-prepared mechanism, the government is now ready to float the prices of diesel across Peninsular Malaysia starting at midnight.

“Thus, the retail prices for diesel at all fuel stations will be set at RM3.35 per litre, which is according to the unsubsidised market price,” Amir said when announcing the move in a press conference this evening.

This is in line with the government's move to make diesel subsidies targeted, where eligible consumers will get a cash transfer of RM200 per month to offset the market prices.

The first payout for the RM200 to some 30,000 recipients will also be done on Monday.

Each individual owner will only receive RM200 regardless of how many diesel vehicles they possess, he said.

Amir also said that those who have more than one vehicle and use them for business can still apply for a fleet card under two other diesel subsidy initiatives for the public transport and logistics transport sectors.

No closing date for registration

The minister said applications for the targeted subsidy remain open and encouraged eligible consumers who have yet to register with the Budi Madani system to do so.

“Starting tomorrow, 30,000 diesel vehicle owners will receive their first monthly Budi Madani cash assistance.

“I would like to stress that this cash assistance (initiative) has no closing date, and thus I call for all those eligible to apply for it to do so,” he said.

According to Amir, the targeted subsidies had to be done to save Malaysia from incurring further losses due to diesel smuggling and misappropriation.

This comes after the government spent some RM14 billion last year in diesel subsidies compared to only RM1.4 billion in 2019, despite no drastic increase in the number of diesel vehicles in the country.

He said the government expects that the targeted subsidies for diesel would save Malaysia around RM4 billion a year.

This is after it had factored in costs that would be incurred by the Budi Madani initiative and two other schemes for the public transport and logistics sectors.

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