Amir Hamzah's diesel subsidy rationalisation explanation sets off heated debate in Dewan Rakyat

KUALA LUMPUR: Finance Minister II Datuk Seri Amir Hamzah Azizan’s explanatory speech on the diesel subsidy rationalisation in the Dewan Rakyat triggered a heated debate between the Opposition and government blocs.

Datuk Seri Radzi Jidin (PN-Putrajaya) said the government should not be detached from the reality where most of the industry players were recently imposed with a service tax hike.

“The industry has just experienced a hike in service tax, from 6% to 8%. For the logistics sector, they were imposed with a 6% tax,” he said when debating the explanatory speech.

Sim Tze Tzin (PH-Bayan Baru) said that the move was necessary, arguing that a blanket subsidy would not be sustainable.

“Diesel subsidy is still available for those who deserve it, such as farmers, and needy people.

“What has been played up is only politics,” he said, leading to brickbats from Opposition MPs.

In response, Amir Hamzah said MPs should not politicise the matter, rather it should be discussed rationally and backed by data.

“We never removed the subsidy, we only targeted it to the people who are in need. We don’t want to subsidise Thai nationals,” he said, referring to diesel smuggling at the borders.

He added that retail sales of diesel decreased by 30% during the first week after the announcement of the fixed diesel prices.

Amir Hamzah said that this figure is equal to eight million litres per day, while the commercial sales of the fuel have increased by as much as four million litres daily during the same period.

"The trend of increasing sales of commercial diesel reflects a positive sign that the leakage of subsidised diesel has reduced.

"Among the information received from one of the oil companies selling diesel at the border, it shows a 40% decrease and confirms that before this, there was diesel smuggling activity to a bordering country," he said.

Amir Hamzah also said that enforcement agencies have been actively working together and organising various operations to curb smuggling activities.

He added that the action was to combat elements that affected the stability of the supply of goods and services and curb the element of price profiteering in the market.

The task force involved the Home Affairs Ministry and the Domestic Trade and Cost of Living Ministry in collaboration with the Malaysian Armed Forces, the Royal Malaysia Police, the Royal Malaysian Customs Department, the Malaysian Maritime Enforcement Agency, the Immigration Department and the Road Transport Department.

"Ops Tiris 3.0, which took place from Jan 1 to June 22 recorded a total of 570 cases involving the seizure of more than 5.1 million litres of diesel oil with an estimated value of almost RM12mil.

"The value of confiscated assets and equipment totaling RM46mil and 275 arrests have been made on the individuals involved," he added.

Amir also said that as of June 20, a total of 73,000 logistics companies involving 223,000 vehicles have submitted their applications for the diesel fleet cards.

He added that 129,000 fleet cards have since been issued by petroleum companies following the applications.

“For Budi Madani, as of June 19, there were a total of 100,000 individual and Agri-Komoditi applications were approved.

“Of the total number, 76,000 applicants have received the RM200 monthly cash assistance as early as June 10,” he added.

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