KUALA LUMPUR: The government has recorded savings of over RM400mil a month following the diesel subsidy rationalisation implemented last year, says Deputy Finance Minister Lim Hui Ying.
She said the Budi My Subsidy Diesel programme, which began on June 10 last year, would allow the government to save around RM5bil annually, with the funds redirected towards development projects and strengthening the social safety net through various cash aid initiatives.
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"These... programmes (include) Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara)," she told Chong Chieng Jen (PH-Stampin) in the Dewan Rakyat on Wednesday (Nov 12).
Chong had asked the Finance Ministry to state whether or not diesel sales in Peninsular Malaysia had decreased, and the amount saved by the government following the implementation of the subsidy rationalisation.
Lim said that under Budget 2025, the government had increased allocations for the STR and Sara programmes to RM13bil from RM10bil the previous year.
This was further raised to RM15bil under the enhanced Sara initiative.
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She added that the government also introduced the Budi Madani Individu and Budi Madani Agri Commodity programmes, providing RM200 in monthly cash aid or RM2,400 annually to eligible private owners of diesel vehicles.
"As of Oct 31 this year, a total of 320,000 diesel vehicle owners, including farmers, breeders and smallholders, have benefitted from these programmes, with payments amounting to RM850mil," she said.
For the logistics sector, she said the Budi Madani Diesel programme had approved applications from 121,618 goods transport companies covering 355,074 vehicles as of Sept 30 this year.
"This ensures that operating costs in the logistics sector do not rise sharply and that essential goods remain affordable," Lim said.
She explained that before the subsidy rationalisation, diesel was priced at RM2.15 per litre, compared with RM3.35 per litre currently – the unsubsidised price.
"Before the rationalisation, the average monthly volume of subsidised diesel sold between January and May 2024 was about 770 million litres.
"After the rationalisation, the average fell to around 465 million litres per month between June and December, showing a clear reduction in leakages. This also indicates that diesel smuggling activities have declined," she said.
Lim noted that commercial diesel sales had increased after the rationalisation, suggesting that subsidised diesel previously diverted for commercial use, such as at construction sites or factories, had been curtailed.
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Meanwhile, Roslan Hashim (PN-Kulim Bandar Baharu) raised concerns about possible leakages in subsidy distribution among fishermen in Zones B and C, and asked how the government would ensure that those eligible, especially in rural areas, would not be left out due to registration or documentation issues.
Lim replied that registered fishermen were not affected by the Budi Individu or Budi Komoditi programmes as they were already eligible to receive subsidised diesel under the Budi 95 scheme launched in October.
"All fishermen registered with the Fisheries Development Authority of Malaysia – around 18,000, including inland fishermen – are eligible for Budi 95.
"We have also extended eligibility to private boats registered with the Sarawak Rivers Board, Sabah Ports and Harbours Department, and other relevant authorities.
"However, if there are still groups who believe they have been overlooked, they can raise the matter with us. We will review each case, and if they are found to be eligible, we will ensure they receive the subsidy they deserve," she added.
Lim said the targeted subsidy framework under the Ekonomi Madani approach had proven effective in reducing leakages, optimising fiscal spending, and ensuring that assistance reached those who truly needed it.
