The drastic decrease in diesel sales following the implementation of the government’s fuel subsidy rationalisation programme points to the fuel subsidy being widely abused, according to domestic trade and cost of living deputy minister Fuziah Salleh.
In a post on her Facebook page, she said that there has been a substantial shift in diesel consumption patterns in the country since the introduction of the targeted diesel subsidy on June 10, with diesel sales having declined by 30%, equating to a reduction of eight million litres per day. Conversely, purchases of commercial diesel, which is sold at market price, have risen by four million litres per day.
Additionally, she said that petrol stations near Malaysia’s borders have seen a 40% downturn in diesel sales, The Star reports. “This is a clear indication that smuggling to neighbouring countries is a major issue,” she wrote, echoing what finance minister II Datuk Seri Amir Hamzah Azizan said earlier this week.
On June 10, rationalisation of the diesel fuel subsidy saw the retail price of Euro 5 B10 and B20 diesel in Peninsular Malaysia being increased by RM1.20, or 56% from its subsidised rate of RM2.15 per litre, to RM3.35 per litre.
Financial assistance to users of diesel fuel is now dispensed through the Budi Individual and Budi Agri-Commodity categories, through which eligible applicants will receive cash assistance of RM200 every month. Meanwhile, larger-scale land transport and logistics operators may apply for the subsidised diesel control system (SKDS) 1.0 and 2.0 schemes, which currently covers a total of 33 types of diesel-powered land transport vehicles.
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Get rid of all subsidies, and focus on strengthening the currency.
It can also meant people are not using their diesel vehicles.
if this is the real reason for the fuel subsidy “rationalization” exercise, then, please do hurry up on ensuring the ron 95 petrol prices are hiked to the global price levels as soon as possible (like yesterday) as this fuel has a much larger demand regionally and globally than diesel…
and thus that will ensure no smuggling of ron 95 petrol will happen.