PUTRAJAYA: The government's diesel subsidy rationalisation under the Budi Madani Diesel (Budi Diesel) programme is expected to generate savings of up to RM2bil annually, says Finance Minister II Datuk Seri Amir Hamzah Azizan.
Speaking at a briefing on the diesel subsidy on Monday (June 22), Amir Hamzah said this would be achieved by ensuring that subsidies are targeted only at eligible recipients, thereby reducing leakages.
He also said the move was necessary as the war in the Middle East and persistently high global oil prices had significantly increased the government's fuel subsidy bill.
“Prior to the conflict, the government spent about RM800mil a month on petrol and diesel subsidies.
“However, subsidy costs surged to nearly RM4.7bil in March and RM4.9bil in April this year following sharp increases in global oil prices.
“This represents a substantial increase. Apart from managing the impact of higher oil prices, Malaysia must also ensure that fuel supplies remain stable and sustainable.
“Our priorities are to ensure sufficient fuel supply and to make sure that subsidies are received only by those who are eligible,” he said.
He added that the government's two main priorities are to ensure that fuel supplies remain sufficient and that subsidies are provided only to those who are eligible.
“Through these improvements, the government expects to achieve diesel subsidy savings of up to RM2 billion annually,” he said.
Meanwhile, he said the Subsidised Diesel Control System (SKDS) will be expanded to Sabah and Sarawak, enabling about 70,000 eligible commercial vehicles, particularly those involved in the transportation of consumer goods, to obtain subsidised diesel at RM2.15 per litre through the use of oil companies’ fleet cards.
At the same time, existing diesel subsidy mechanisms for strategic and critical sectors will remain in place, he said.
“These include subsidised diesel at RM1.65 per litre for fishermen, the BUDI Agri-Komoditi programme for small-scale farmers and registered commodity landholders, and SKDS 1.0, under which subsidised diesel is provided at RM1.88 per litre for land-based public transport services, including school buses and express buses,” he said.
