PETALING JAYA: The implementation of diesel subsidy rationalisation without comprehensive measures to tackle the rising cost of living is a bad decision by the government, says Tan Sri Muhyiddin Yassin.
Saying it was "just the beginning," the Perikatan Nasional chairman stated that people would be further burdened when the government removed RON95 petrol subsidies soon.
Muhyiddin claimed the move by the Pakatan Harapan-Barisan Nasional administration was evidence that they did not heed the people’s complaints.
"The increase in diesel prices by RM1.20 or 56% is very high and does not take into account how the people are already burdened by inflation and the high cost of living.
"The sudden increase will also cause an economic shock and result in a multiplier effect on other economic and social sectors.
"The cost to the people may be much bigger compared to the RM4bil saved by the government through the rationalisation. Is this worth it?" he said in a statement on Monday (June 10).
The Bersatu president was also sceptical about how the Subsidised Diesel Control Scheme programme, which was limited to select commercial vehicles, would prevent price increases along the supply chain.
"Strict conditions under the Budi Madani scheme can also see a large number of consumers being ineligible to receive it.
"This includes farmers and smaller agricultural players who use diesel-powered vehicles to produce local agricultural products," he said.
Taking a further swipe at the cash aid for those affected by the diesel subsidy, Muhyiddin said the RM200 was "certainly not enough" to cover the now floating price of diesel.
"Eventually, increasing costs along the supply chain will happen, and this will be borne fully by consumers," he said.
On Sunday (June 9), Finance Minister II Datuk Seri Amir Hamzah Azizan said diesel prices would be floated and retail at RM3.35 per litre in the peninsula starting on Monday (June 10).
He said the price was based on the Automatic Pricing Mechanism formula for May.
The previous price of diesel announced on June 5 was RM2.15 per litre, which would be maintained for Sabah, Sarawak, and Labuan.
When announcing the fuel subsidy rationalisation on May 21, Prime Minister Datuk Seri Anwar Ibrahim said subsidies for diesel would be withdrawn for "the rich and foreigners".
The diesel subsidy would first be rationalised in the peninsula and would only be implemented in Sabah and Sarawak later, which would save the nation RM4bil annually, he said.
