Government’s Targeted Diesel Subsidy Yields Positive Results
Reduction in Claims and Leaks
Diesel subsidy claims by oil companies for August 2024 have decreased by 51.6% against claims in May 2024, while the number of claims has also fallen by 47.4% over the same period, according to the Economy Ministry. This significant reduction in claims is a result of the June 10, 2024 implementation of the targeted diesel subsidy.
Philosophy Behind Targeted Subsidy
The government has been implementing targeted subsidies in phases to plug in leakages, which have resulted in billions of ringgit losses to the country. The philosophy behind this approach is to ensure that subsidies are more effective and efficient in reaching the intended beneficiaries. The government estimates that the targeted implementation of diesel subsidy will result in savings of RM4 billion in operating expenses per year.
Changes in Subsidy Scheme
The introduction of the targeted diesel subsidy has brought about changes in the way subsidies are distributed. The subsidised diesel control system (SKDS 2.0) using fleet cards has been implemented for logistics companies, allowing them to receive diesel supplies at petrol stations at RM2.15 per litre. Public land transport vehicles, including school buses, express buses, stop-and-go buses, ambulances, and volunteer firefighters, still enjoy super subsidised prices at RM1.88 per litre, while fishermen receive a special rate of RM1.65 per litre.
Additional Assistance for Eligible Recipients
The government has also introduced individual and agro-commodity programs, including cash assistance of RM200 per month to eligible private diesel vehicle owners, including small farmers and commodity smallholders. This monthly cash assistance helps to offset the effect of rising diesel prices without affecting the disposable income of the target group.
Savings and Impact
The targeted diesel subsidy has resulted in significant savings and a reduction in wastage. The government’s efforts to plug in leakages have helped to reduce the financial burden on taxpayers and ensure that subsidies are more effective in reaching those who need them most.
FAQs
Q: How has the number of diesel subsidy claims changed since the implementation of the targeted diesel subsidy?
A: The number of claims has decreased by 47.4% over the same period.
Q: What is the government’s estimate of savings through the targeted implementation of diesel subsidy?
A: The government estimates that the targeted implementation of diesel subsidy will result in savings of RM4 billion in operating expenses per year.
Q: Who are eligible for the individual and agro-commodity programs?
A: Eligible recipients include private diesel vehicle owners, including small farmers and commodity smallholders.