PUTRAJAYA: Diesel subsidies for certain groups in Peninsular Malaysia will be discontinued starting 12am today (June 10), says Datuk Seri Amir Hamzah Azizan.
This, the Finance Minister II said, will put the price for a litre of diesel at about RM3.35 per litre according to the automated pricing mechanism from the current price at about RM2.15.
He said it follows the unsubsidised market price based on the average for May 2024, according to the automatic pricing mechanism formula.
"With the targeted assistance mechanism already in place, the government is now ready to adjust the diesel price for all states throughout Peninsular Malaysia.
"For the following period, the current diesel price will be announced weekly, following the current practice of the Finance Ministry," he said at a press conference, here, today.
Amir said the government would continue to monitor the situation to avoid price instability.
He assured that the decision to implement targeted subsidies for diesel "was not rushed" and the government, through relevant ministries and government agencies, have given special attention to studying and ensuring the best mechanism to protect the sectors and individuals eligible for assistance so that economic activities are not disrupted.
He said with the rationalisation of subsidies, the government anticipates an immediate reduction in losses from leakage activities, leading to annual saving of RM4billion.
"The amount of subsidised diesel increased sharply from 6.1 billion litres in 2019 to 10.8 billion litres in 2023, even though the number of diesel vehicles did not increase significantly.
"Diesel subsidies have increased tenfold from RM1.4 billion in 2019 to more than RM14.3 billion in 2023.
"The savings obtained by the government from this crucial step will ensure that more resources can be channeled into other critical sectors, which will directly improve the quality of life for the people, including public infrastructure, healthcare, and education for our children," he said.
He called for those who are eligible to apply for the Budi Madani diesel subsidy programme and the subsidised diesel control system (SKDS).
The Budi Madani programme grants RM200 monthly to eligible individuals, small-scale farmers and commodity growers starting May 28.
A total of 30,000 diesel vehicle owners would receive the first RM200 monthly cash assistance from Budi Madani tomorrow.
"Once again, I would like to remind eligible Malaysians to apply for the Budi Madani cash assistance.
"Those who apply in June will be eligible to receive cash assistance this month.
"Those who missed applying in June will be eligible to receive cash assistance for the month of their application and the subsequent months."
In announcing the fuel subsidy rationalisation in a national address on May 21, Prime Minister Datuk Seri Anwar Ibrahim said subsidies for diesel would be withdrawn for "the rich and foreigners."
To prevent any drastic increase in the cost of goods and services, Anwar said subsidies would be continued for traders using diesel-powered commercial vehicles and for public transportation.
Diesel subsidies will also continue for certain categories of fishermen.
He said cash aid would also be given to eligible individuals who own private diesel-powered vehicles, such as small traders and farmers, among others.