Expanded diesel subsidy may revive buyer confidence, says MAA

MAA said demand for diesel vehicles had declined sharply since diesel prices were floated in June 2024, particularly in the pick-up truck and SUV segments in Peninsular Malaysia, which has seen sales drop by almost 25%.

“The targeted diesel subsidy is expected to encourage consumers to revisit their purchasing plans, especially in the pick-up truck segment, which has increasingly become a popular lifestyle vehicle, as well as diesel-powered SUVs,” MAA said in a statement.

The government will lower the price of subsidised diesel for Malaysians nationwide to RM2.10 per litre from July under the Budi Madani Diesel programme.

Currently, diesel is sold at a subsidised retail price of RM2.15 per litre at petrol stations in Sabah and Sarawak, compared with the unsubsidised retail price of RM4.07 per litre in Peninsular Malaysia.

MAA also commended the government’s decision to provide an additional 100 litres of subsidised diesel to eligible owners of pick-up trucks and SUVs.

This is on top of the existing 200-litre allocation under the Budi Madani Diesel programme, bringing the total subsidised quota to 300 litres.

MAA president Shamsor Zain said the association appreciated the government’s commitment to motorists affected by higher diesel prices and hoped Putrajaya would consider extending the additional 100 litres of subsidised diesel to include multi-purpose vehicles (MPVs).

Shamsor said diesel-powered MPVs are commonly used by larger families for their daily transport needs, and extending the subsidy to this segment would have minimal fiscal impact as diesel-powered MPVs account for only about 1% of total industry volume.