KUALA LUMPUR, June 17 — Prime Minister Datuk Seri Anwar Ibrahim said the government still pays around RM7 billion in diesel subsidies in Peninsular Malaysia.
The subsidies have not been abolished, and the rationalisation is to ensure more efficient management of subsidies so that they are not misused and reach the appropriate groups.
“The main goal of the diesel subsidy rationalisation policy is to ensure that subsidy wastage no longer continues while ensuring that the savings are returned to the wider population,” he said in a statement today.
Savings from implementing targeted subsidies will certainly be returned to the people in the form of education, health, public transportation, and other sectors that have the greatest impact on the public.
The Madani government will also remain committed to combating diesel smuggling while striving to balance its efforts with issues of supply and living costs.
Anwar said the Domestic Trade and Cost of Living Ministry launched Ops Tiris on March 1 last year to combat the misappropriation of subsidised diesel benefiting parties not eligible for the subsidies.
As of December 31, 2023, 6.44 million litres of diesel, estimated to be worth RM14.12 million, had been seized.
Due to the positive results and developments of the operation, Ops Tiris 3.0 has been launched with an expanded scope covering other controlled goods, namely refined white sugar (coarse and fine), one kg polybag cooking oil, RON95 petrol and liquefied petroleum gas.
“As of June 14, controlled goods worth RM12.96 million have been seized, with diesel accounting for the bulk of smuggled and misappropriated controlled items,” he said.
Additionally, the price of pure palm cooking oil in bottled packaging has been maintained at RM6.90 (1kg), RM13.30 (2kg), RM19.60 (3kg) and RM30.90 (5kg) since the Madani government took over leadership, even though the world crude palm oil (CPO) prices have exceeded the threshold price of RM3,890 per tonne.
For example, with CPO prices at RM4,215 per tonne in March and RM4,256 per tonne in April, the price of 5kg pure palm cooking oil could have risen to between RM33 and RM35.
On June 9, Finance Minister II Datuk Seri Amir Hamzah Azizan announced that the price of diesel at all retail stations in the Peninsula would be set at RM3.35 per litre, which is the market price without subsidy, based on the May 2024 average according to the Automatic Pricing Mechanism formula starting on June 10.
He said the price float and targeted diesel subsidy implementation could save RM4 billion annually while strengthening Malaysia’s financial position in the long term.
The diesel price will be announced weekly according to the current practice of the Finance Ministry, and the government will continue to monitor the situation to avoid price instability.
However, the subsidy rationalisation does not involve consumers in Sabah, Sarawak, and Labuan.
— Bernama
