Rationalization of diesel subsidies as Malaysian government costs increase tenfold: Finance Minister II
The decided to rationalize diesel fuel subsidy in Malaysia is because government costs have increased tenfold in just five years, Star report.
The Malaysian government paid RM14.3 billion in diesel subsidies last year, compared with RM1.4 billion in 2019, and subsidized diesel leaks were identified as the main culprit for the increase. significant in subsidy payments as the amount of subsidized diesel increased from 6.1 billion liters to 10.8 billion liters during the same period.
“One of the reasons for subsidy rationalization is to close financial gaps. The focus now is on streamlining subsidies so that the government can function effectively. Finance Minister II Datuk Seri Amir Hamzah Azizan said: A well-run government will help people in other ways.
According to the report, the government hopes to save RM4 billion per year through rationalization of diesel subsidies and the savings from this can then be transferred to other areas.
The main reason for the leakage of subsidized diesel fuel is the large difference in fuel prices compared to neighboring countries such as Thailand, Singapore, and Indonesia. While the retail price of diesel in Malaysia is capped at RM2.15/litre, the fuel is priced at RM4.12/litre in Thailand, RM4.73/litre in Indonesia and RM8.87/litre. liter in Singapore, The Star reported.
Earlier this week, the Malaysian government announced the Budi Madani subsidy program, in which successful applicants will receive RM200 per month for their diesel vehicles. The Budi Madani website appeared online shortly after; Here’s how to apply for benefits.
Meanwhile, the subsidized diesel engine control system 2.0 (SKDS 2.0) program began in March this year and five petroleum companies issue 90,000 fleet cards to qualified transportation businesses this week.
The SKDS program targets the logistics sector or those providing essential services to consumers, while Budi Madani targets private owners of diesel vehicles and small agricultural producers. The Ministry of Domestic Trade and Cost of Living (KPDN) yesterday announced that those looking to receive diesel subsidies can subscribe to Budi Madani or SKDS 2.0, but not both.
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