Increase in sale of commercial diesel after subsidy removed

Second finance minister Amir Hamzah Azizan said the move to replace broad diesel subsidies with a more targetted mechanism will save the government RM4 billion a year.

PETALING JAYA: The sale of commercial diesel has increased by four million litres per day following the introduction of targeted diesel subsidies, says second finance minister Amir Hamzah Azizan.

Amir said this was proof that certain sectors had previously been purchasing subsidised diesel when they should have been purchasing it at market prices.

“The increase in commercial diesel sales is a positive sign that the leakage of subsidised diesel has decreased,” he told the Dewan Rakyat, Bernama reported.

He said that although the move to replace broad diesel subsidies with a more targetted mechanism will save the government RM4 billion a year, Putrajaya is still forking out up to RM10 billion in diesel subsidies.

“Following the refocusing of diesel subsidies, the retail sale of diesel fuel at petrol stations has decreased by nearly eight million litres per day, or 30%, in the first week after the announcement compared with the week before the announcement.

“During the same period, commercial diesel sales increased by four million litres per day, indicating that some of the subsidised retail diesel was used by the industrial sector, which should have been purchasing diesel at market prices,” Amir said.

The diesel subsidy in Peninsular Malaysia was lifted on June 10, with its price rising from RM2.15 to RM3.35 per litre. However, the Budi Madani programme provides monthly aid of RM200 to selected vehicle owners and businesses to offset the higher pump prices.

For the diesel subsidy scheme, fishermen can obtain diesel at RM1.65 per litre, school bus operators and nine other sectors can enjoy subsidised diesel at RM1.88 per litre, while the logistics sector, involving 23 types of vehicles transporting goods, qualifies to enjoy subsidised diesel at RM2.15 per litre.

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