Targeting diesel subsidies in the Peninsula ensure oil companies are ready if expanded – MoF

KUALA LUMPUR: The implementation of diesel subsidy targeting in Peninsular Malaysia is the first step to give space to oil companies to develop and complete the necessary facilities and infrastructure, according to the Ministry of Finance (MoF).

According to Bernama, the MoF said it was to ensure oil companies were ready if the move was extended to the states of Sabah, Sarawak and the Federal Territory of Labuan.

“Currently the government does not intend to implement diesel subsidy targeting in Sabah and Sarawak considering that the majority of modes of transport to carry out economic activities as well as development programs and projects in the two states use diesel fuel.

“Furthermore, the geographical conditions there limit the feasibility of the ‘fleet card’ mechanism which requires more sophisticated facilities and infrastructure especially in the interior,” according to the MoF in a written response published on the Parliament’s website.

‘Fleet card’ is a diesel subsidy system that has been improved to ensure that vehicles eligible for subsidy can be monitored in terms of diesel consumption and avoid leakage.

The MoF said this in response to a question from Datuk Dr Ahmad Yunus Hairi (PN-Kuala Langat) who asked the ministry to state whether the implementation of targeted diesel subsidies was only implemented in Peninsular Malaysia without involving Sabah and Sarawak.

Meanwhile, in response to a question from Datuk Muhammad Bakhtiar Wan Chik (PH-Balik Pulau) who wanted to know how the government can save costs if eligible diesel users receive Budi Madani of RM200 per month, the MoF said cash assistance of RM200 is sufficient.

“The determination of the amount of cash assistance of RM200 per month is the result of in-depth research and consultation with various stakeholders, including vehicle owners, economic experts and industry.

“Based on data from the 2022 Household Income and Expenditure Survey Report (HIES) issued by the Department of Statistics Malaysia (DoSM) regarding the monthly expenditure on household diesel fuel, it is estimated that RM200 is sufficient to cover the additional monthly diesel costs for 80 percent of households in Peninsular Malaysia,” he said.

According to the MoF, the government will constantly monitor the current situation including the implementation of diesel subsidy targeting and if necessary, improvements from time to time will be made to ensure that the truly deserving groups continue to receive the government’s attention in facing the cost of living challenge.