Diesel: Tour bus operators losing RM3.6k per bus each month

Tour bus operators are losing about RM3,600 per month on each bus they operate, according to an industry group.

This is due to the government’s move to withdraw diesel subsidies at the pump, resulting in a price increase of RM1.20 per litre. At the same time, tour bus and van operators are ineligible for other mechanisms for diesel subsidy.

“It is not just a simple matter of passing the extra cost charged by transportation owners to the tourists but to honour these contractual tour package arrangements and obligations that have been established for the next six to nine months.

“Tourism business involves goodwill and relationship and bearing in mind some of these key source destinations are price sensitive, particularly in the Indian, Asean, and China market,” said Malaysian Tourism Federation (MTF) president Tan Kok Liang in a statement today.

The MTF urged the government to provide at least 3,000 litres of subsidised diesel per vehicle per month up to March 31, 2025.

Alternatively, the government should revert to the previous diesel price of RM2.15 per litre until that date.

This will afford the tour operators the necessary time to adjust to the new pricing structure.

Otherwise, Tan estimated that tourism operators stand to lose over RM100 million over the next six months, given there are about 10,000 tourism vehicles on the road.

“The tourism ecosystem is comprised of multiple service providers and intermediaries. Ultimately, the final contractual party may have to bear the brunt of the increase. For example, corporate incentive events in Malaysia had been pre-planned a year in advance.

“Recently a tour company handling an international incentive of 10,000 pax for a six-day programme have to absorb an additional cost of RM300,000 as the bus operators declined to compromise,” he said.

The government has withdrawn subsidised diesel at the pump since June 10 in a bid to rationalise its subsidy scheme and stem smuggling activities. This raised the price of diesel from RM2.15 per litre to RM3.35 per litre.

Instead, eligible private vehicle owners can apply for an assistance of RM200 per month, while commercial vehicle owners can apply for fleet cards under the Subsidised Diesel Control System.

Finance Minister II Amir Hamzah Azizan said this will save the government RM4 billion for other programmes.

Prime Minister Anwar Ibrahim cited the price increase of tour operators in Singapore as vindication for the move, saying that it shows that the previous subsidy scheme was benefiting foreigners.

However, some local industry groups, such as tour bus operators and tow truck services, had pleaded with the government to reconsider after finding themselves left out of the new subsidy schemes.

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