Diesel subsidy rationalization shows results, average daily sales of Malaysian Pen drop over 30% – govt

In less than a month, the government’s move rationalizing diesel subsidies is starting to show results, especially in curbing smuggling. Evidence of this is the more than 30% drop in average daily diesel sales in Peninsular Malaysia, Finance Minister II Datuk Seri Amir Hamzah Azizan told parliament.

The senator also said there are gas stations in border areas that have seen diesel sales drop by 40 to 50 percent, Bernama reported yesterday.

Amir Hamzah had said this before in the Dewan Rakyat, explained on June 24 that diesel sales fell by eight million litres a day compared to the previous week, while commercial diesel sales (which companies buy at market prices without subsidies) rose by four million litres. “The upward trend in commercial diesel sales is also positive as it shows a reduction in leakage of subsidised diesel,” he said.

The minister said an oil company had informed the authorities that diesel sales at gas stations near the national border had dropped by 40%. “This information was obtained from an oil company, which provided further evidence of diesel smuggling into neighbouring countries,” he added.

The national news agency also added that while the government of Prime Minister Datuk Seri Anwar Ibrahim has been criticised for its bold move to rationalise diesel subsidies, the positive impacts are already evident even at this early stage. In his Budget 2024 speech, Anwar, who is also the finance minister, said Malaysia was losing RM10 billion to diesel smuggling.

The diesel subsidy rationalization plan is said to save the government about RM4 billion a year. In 2023, the country spent RM14.5 billion on diesel subsidies.

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