First phase of targeted diesel subsidy in the peninsula to ensure oil companies are ready - MoF

KUALA LUMPUR: The implementation of the targeted diesel subsidy in Peninsular Malaysia is the first phase move to allow oil companies to develop and complete the necessary facilities and infrastructure, according to the Ministry of Finance (MoF).

The MoF said this is to ensure oil companies are ready if the move is extended to the states of Sabah, Sarawak and the Federal Territory of Labuan.

“Currently the government does not intend to implement targeted diesel subsidy in Sabah and Sarawak because the majority of modes of transport to carry out economic activities as well as development programmes and projects in the two states use diesel fuel.

“Furthermore, the geographical situation there limits the feasibility of the ‘fleet card’ mechanism which requires more sophisticated facilities and infrastructure especially in the interior,“ according to the MoF in a written reply published on the parliament’s website on Tuesday to a question from Datuk Dr Ahmad Yunus Hairi (PN-Kuala Langat) who asked the ministry to state what is the rationale for the implementation of targeted diesel subsidy only in the peninsula without involving Sabah and Sarawak.

Meanwhile, in reply to a question from Datuk Muhammad Bakhtiar Wan Chik (PH-Balik Pulau) who wanted to know how the government can save costs if eligible diesel users receive Budi Madani of RM200 a month, the MoF said the cash assistance of RM200 is sufficient.

“The determination of the amount of cash assistance of RM200 per month is the result of in-depth research and consultation with various stakeholders, including vehicle owners, economic experts and industry.

“Based on data from the Household Income and Expenditure Survey Report (HIES) 2022 issued by the Department of Statistics Malaysia (DoSM) regarding monthly household diesel fuel expenditure, it is estimated that RM200 is a sufficient amount to cover the additional monthly diesel cost for 80 per cent of households in Peninsular Malaysia,“ it said.

According to the MoF, the government will constantly monitor the current situation including the implementation of the targeted diesel subsidy and, if necessary, improvements from time to time will be made to ensure that the truly deserving groups continue to receive the government’s attention in facing the cost of living challenges.