Malaysia is facing a serious problem with subsidised diesel leakages, with a possibility of ineligible parties still enjoying the subsidy, according to finance minister II Datuk Seri Amir Hamzah Azizan.
Citing the example of subsidised diesel usage, he said that before the Covid-19 pandemic, it was around 6.1 billion litres, but it had now reached 10.8 billion litres. “That is a 70% increase. So where did the subsidy go? For now, we feel that there is a high possibility that the subsidy has shifted to sectors that are not eligible for it,” he said.
“When you buy diesel from a petrol station, you pay RM2.15 per litre, but if you’re in a company and not eligible for a diesel subsidy, you have to pay around RM3.48 per litre at the commercial rate, so the difference is significant,” he said.
He said that this leakage puts a greater financial burden on the country’s management, Bernama reports. “We need to stop this mismanagement. We need to deal with the loopholes in terms of this leakage, of money being paid for companies that should not receive subsidies. It should go to the people, to build better schools, clinics and other essential infrastructure,” he explained.
Amir Hamzah added that given the amount of diesel subsidies given last year, which was about RM20 billion, the government was hoping to reduce that by half. The subsidised diesel control system (SKDS) 2.0 for land transport is part of the effort to reduce the spend.
The SKDS involves the participation of five oil and gas firms (Petronas. Shell, Petron, Caltex and BHPetrol). Under the programme, land transport companies that operate nine types of vehicles can apply to participate in the MySubsidi diesel system, which will utilise a fleet card system. Applications are now open, with fleet card use set to begin on April 1.
The nine vehicle types eligible for the programme are general cargo lorries, lorries transporting bottled drinks, refrigerated and luton lorries as well as prime movers, flour tankers, water tankers and panelled/window vans.
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