KUALA LUMPUR – The government will still have to spend RM10 billion on diesel subsidies despite estimated savings of RM4 billion a year from retargeting subsidies for the fuel, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
The RM10 billion is for subsidies in Sabah and Sarawak, the public transport and logistics sector in Peninsular Malaysia, fishermen, as well as cash assistance for individual diesel vehicle owners and small agri-commodity operators.
“This will reduce the pressure on the price of consumer goods and the impact on the people,” Amir Hamzah told the Dewan Rakyat in a briefing on the implementation of the government’s diesel subsidy restructuring.
Subsidies have not been abolished for those sectors and Sabah and Sarawak, even though the retail price of diesel was raised from RM2.15 to RM3.35 per litre effective June 10.
Amir Hamzah said since then, there has been an increase in commercial diesel sales, which proved the effectiveness of removing the blanket subsidy to curb smuggling and illegal sale of subsidised diesel.
“It is a positive sign that the leakage of subsidised diesel has decreased,” he said.
The sale of commercial diesel has also increased by four million litres per day, he added.
The government is also confident the national economy will achieve the official inflation rate and gross domestic product (GDP) growth rate this year despite the withdrawal of the blanket diesel subsidy.
The government is targeting an inflation rate of between 2% and 3.5%, and GDP growth of between 4% and 5% this year.
Under the diesel subsidy restructuring, the fuel is RM2.15 per litre for logistics vehicles, RM1.88 per litre for school buses and other land public transport vehicles, and RM1.65 per litre for fishermen. – June 24, 2024. – June 24, 2024