PUTRAJAYA, June 9 — The price of diesel at all retail stations in the Peninsula is set at RM3.35 per litre effective 12.01am tomorrow, which is the unsubsidised market price based on the May 2024 average according to the Automatic Pricing Mechanism formula.
Finance Minister II Datuk Seri Amir Hamzah Azizan said the fixed price and implementation of targeted diesel subsidy would see the government save RM4 billion per year, besides strengthening the country's financial position in the long run.
"The targeted subsidy decision (by the government) is not an easy step, but one that has been given particular attention.
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Finance Minister ll Senator Datuk Seri Amir Hamzah Azizan delivers his speech before officiating Bursa Malaysia As A Multi Asset Exchange at Bursa Malaysia, Kuala Lumpur on January 16, 2024. — Picture by BERNAMA[/caption]
"We want to curb the leakages, which have resulted in a loss for the people and the country. We have suffered huge losses yearly, and that can impede the country's economy,” he said during a press conference today.
Prime Minister Datuk Seri Anwar Ibrahim, in his National Address on May 21, said that the Cabinet had agreed to implement the targeted diesel subsidy, thus saving the government about RM4 billion annually.
However, the subsidy does not affect consumers in Sabah and Sarawak.
Amir said that for the following periods, the diesel price will be announced every week according to the Finance Ministry's current practice, and the government will continue to monitor the situation to avoid price instability.
He said the diesel subsidy had increased ten-fold from RM1.4 billion in 2019 to over RM14.3 billion in 2023.
On the diesel subsidy landscape in Malaysia, at present, with the huge amount spent on diesel subsidy by the government, the diesel retail price in Malaysia is among the lowest in the world.
For the record, diesel is sold in Malaysia at four different prices according to subsidy: RM1.65 for fishermen, RM1.88 for land public transport, RM2.15 for commercial and private vehicles, and the unsubsidised market price for the commercial sector, which reached RM3.60 earlier this year.
"At the same time, it is priced higher in neighbouring countries, about RM4 in Thailand, RM4.50 in Indonesia, and almost RM9 in Singapore.
"This situation invites smuggling to neighbouring countries and misappropriation in commercial sectors that are ineligible to use subsidised diesel," Amir said.
The minister reiterated that the amount the government saved would ensure more resources could be channelled to other critical sectors, which will directly improve the people's quality of life, including public infrastructure, healthcare and education.
As such, through the targeted subsidy, smuggling and misappropriation of diesel would no longer be lucrative activities, which could then, logically, be reduced drastically.
"I want to emphasise that what the government is doing today is re-target the subsidy to those who are eligible only. We want to stop the leakages which have resulted in a loss for the people and the country.
"Every year, we suffer huge losses, and this can hamper the prosperity we deserve. This is a government decision to strengthen the country's long-term financial position,” he said.
— Bernama
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A comparison chart of the diesel prices in Malaysia and in other countries in Southeast Asia, as of June 3, 2024. — Picture by KEMENTERIAN KEWANGAN MALAYSIA[/caption]
