By Karen Bong
KUCHING, Dec 27: Sarawak and Sabah would likely be spared from the phased implementation of the targeted diesel subsidy comes 2024 with prices of the diesel fuel expected to be maintained at RM2.15 per litre.
The speculation arises due to Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim’s announcement in the Dewan Rakyat on Nov 2 that the retargeting of the diesel subsidy in phases will only be carried out in Peninsular Malaysia where Sarawak and Sabah are exempted.
At that time, he said the retargeting will not cover Sarawak and Sabah and that the diesel prices in the two States will continue to remain at RM2.15 per litre, considering the extensive use of the fuel in these regions.
Presently, diesel is fixed at RM2.15 per litre at the pumps, compared to the current market price of RM3.78.
Furthermore, it important to note that diesel subsidy will not be entirely eliminated from Jan 1, 2024 as the Madani government has stated that selected segments, such as the freight companies, would not be affected to mitigate the impact on prices of goods.
Additionally, Madani government had announced that fishermen would continue to enjoy subsidised diesel at RM1.65 per litre, while public transportation, including school buses and vans, will remain at RM1.88 per litre.
The decision to implement the retargeting of the diesel subsidy was announced during the Budget 2024 on Oct 13, with Anwar emphasising that this move was to prevent leakages and smuggling of the merchandise.
He highlighted that based on consumption data, sales of subsidised diesel had increased by 40 per cent since 2019, while the number of vehicles using diesel only rose by 3 per cent.
This, he said, indicates the possibility of serious smuggling activities due to the extremely cheap Malaysian diesel prices.
He reported that the government currently pays RM1.60 for every litre of diesel, totalling RM1.5 billion.
Meanwhile, the Finance Ministry has initiated a comprehensive study on the implementation mechanism of targeted subsidies in collaboration with the Ministry of Domestic Trade and Cost of Living and the Ministry of Economy.
The determination of the mechanism and eligibility criteria for the target group will be based on socio-economic data from households.
In addition, Economy Minister Mohd Rafizi Ramli told the Dewan Rakyat on Nov 6 that three mechanisms are being studied for adoption of the targeted subsidies for petrol and diesel.
He explained that the first mechanism is based on individual net disposable income, second on net disposable household income through social protection or assistance schemes, and third a combination of household and individual earnings, which will be implemented using a subsidies card.
Rafizi said the targeted subsidies programme is expected to be implemented after the Central Database Hub (Padu) system is rolled out in January next year.
He added that the Cabinet will decide on the implementation and follow-up plan, including communication, engagement and support plans to alleviate the burden of the people which will be coordinated by the entire government machinery.
There have been escalated concerns among the public recently regarding the diesel shortage in Sarawak, especially at PETRONAS stations, with some alleging that diesel stocks are being held up in view of the targeted subsidy implementation starting next year, while others alleged it was caused by the new policy on subsidised diesel quotas nationwide. — DayakDaily
