Greed fuels subsidised diesel leak

Seized assets: A boat used to transport subsidised fuel across the border and several tankers meant for storing diesel that were recovered by police in one of its operations.

PETALING JAYA: The misappropriation of subsidised diesel in Malaysia is huge, with the police alone seizing 3.33 million litres of subsidised diesel in the first three months of the year, compared to 2.97 million litres for the whole of last year and 4.72 million litres in 2022.

Apart from slipping across border, the temptation to divert subsidised diesel sold at RM2.15 per litre at petrol stations to the local commercial sector is huge, considering the commercial price is at RM3.48 per litre.

Federal Internal Security and Public Order director Comm Datuk Seri Mohd Kamarudin Md Din said the misappropriation of subsidised diesel is favoured over petrol, which comprised only 5% of the total seizures made by police.

Last month, Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali revealed that based on research carried out by the EU-Asean Business Council, three million litres of diesel worth RM4.5mil is leaked out of Malaysia every day.

The police is not alone in the battle, as it is working with the Domestic Trade and Cost of Living Ministry (KPDN) and other agencies to clamp down on the activities of syndicates and individuals cashing in on subsidised diesel.

On a smaller scale, some people living at the northern border of the peninsula are known to fill up their vehicles with modified tanks that can store up to 200 litres of fuel before transferring it into jerry cans and shipping it across the border in boats, said Comm Mohd Kamarudin.

Comm Mohd Kamarudin.

He said that while the diesel is in demand in neighbouring countries, subsidised diesel is also highly sought after by local industries that need them for their operations but are ineligible for the subsidy.

Comm Mohd Kamarudin said there were also cases of offshore smuggling of diesel taking place in mid-sea, which were crippled by marine police.

Asked if the syndicates are also in cahoots with fishermen and other industries that receive even lower priced diesel, Comm Mohd Kamarudin said investigations show that such diesel is sourced from petrol stations only.

“There are no cases of fishermen being involved nor are there cases of syndicates holding special fleet cards to buy subsidised diesel,” he told The Star in an interview yesterday.

The price of diesel for eligible fishermen is at RM1.65 per litre, while operators of public transportation including school buses and vans pay RM1.88.

He said other police units such as the marine police, the General Operations Force, the Federal Reserve Unit, Wildlife Crime Bureau/Special Investigations, Special Branch and the Criminal Investigation Department are working closely with other government agencies to stamp out the issue, with the multi-agency operation to eradicate the misappropriation of subsidised fuel codenamed Ops Tiris, led by KPDN.

Other agencies involved in Ops Tiris include the police, the Malaysian Maritime Enforcement Agency, Royal Malaysian Customs Department, Forestry Department, Road Transport Department, Fisheries Department, Inland Revenue Board and the Immigration Department.

“We will heed the call of the Prime Minister (Datuk Seri Anwar Ibrahim) to eradicate the leakage of subsidised fuel, which has caused losses amounting to billions of ringgit over the years.

“We have stepped up our enforcement and are collaborating with multiple other agencies to bring down these irresponsible individuals and syndicates,” said Comm Mohd Kamarudin.Police also seized RM228mil worth of assets related to the cases for the same period.

He said apart from suspending business licences of petrol stations caught selling fuel to ineligible parties, owners will also be investigated for money laundering.

“Throughout last year, police made total seizures of contraband and controlled goods, including subsidised fuel worth about RM1bil.

We intend to improve this by at least 10% this year.” Elsewhere, since 2022, police arrested 1,172 people in 792 cases of fuel theft and seized more than 11 million litres of diesel and over 212,000 litres of petrol worth almost RM38mil.