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Budget 2024: Targeted subsidy for diesel in phases – current market price is RM3.75 for private users

Budget 2024: Targeted subsidy for diesel in phases – current market price is RM3.75 for private users

The government has announced that it will introduce a targeted diesel subsidy in phases. This was announced by prime minister Datuk Seri Anwar Ibrahim in his Budget 2024 speech this evening.

According to the PM, subsidised diesel prices will continue to be enjoyed by selected users such as goods transport and logistics companies, while other users will be charged a higher price. With that approach, the government will be able to reduce subsidy leakage and at the same time, reduce the impact on the price of goods for the people.

Anwar said that the current subsidised diesel price, which is set at RM2.15 per litre, would be RM3.75 per litre at market price. As such, the government is bearing RM1.60 for each litre of diesel sold, or around RM1.5 billion ringgit in total.

He said that according to consumption data, subsidised diesel sales in Malaysian have increased by up to 40% since 2019, while the number of vehicles using diesel only increased by less than 3%, leading to the possibility of serious smuggling activities due to the low price of diesel in the country.

No timeframe was mentioned as to when the targeted subsidy would be introduced, but the government has previously stated that it would start doing so with diesel, and it would do so next year.

With private diesel users expected to pay up to RM3.75 per litre for unsubsidised diesel, the days of pickup trucks being lifestyle vehicles (as evident by model launches such as the Ford Ranger Raptor Diesel and Toyota Hilux GR Sport) might just be over, with owners likely to shift over to petrol SUVs instead.

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Tags: Budget 2024


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