No more subsidy: A driver preparing to pump diesel at a petrol station. The price of diesel is set at RM3.35 per litre today.
PETALING JAYA: The RM4bil saved through the targeted subsidy for diesel can now be redirected to public initiatives for the benefit of Malaysians, say consumer groups and business associations.
“It’s a good move because the subsidy will only go to those who deserve it and the B40,” said Federation of Malaysian Consumers Associations (Fomca) chief executive officer Dr Saravanan Thambirajah.
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“There has been a lot of wastage with the blanket subsidy with foreign vehicle owners and the rich enjoying the benefit.
“Now, the money from this wastage can be saved and rechannelled to the people, especially the vulnerable lot,” he said.
The government has made known that the price of diesel in the peninsula is set at RM3.35 per litre today. This is based on the unsubsidised market price for the month of May.
Subsequently, the diesel price will be announced every week.
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Finance Minister II Datuk Seri Amir Hamzah Azizan said the implementation of targeted diesel subsidy would see a savings of RM4bil annually.
Saravanan expressed hope that the Domestic Trade and Cost of Living Ministry would be vigilant in its enforcement by checking traders who might take the opportunity to increase prices of food as well as goods and services.
“Their role is important in checking the prices of goods,” he said.
Consumers Association Penang (CAP) senior education officer NV Subbarow also welcomed the move by the government but urged that care should be taken to ensure that the lower income groups would not miss out.
As such, he said that all the details should be documented properly especially on how the targeted subsidy would be distributed to the eligible recipients.
Malay Businessmen and Industrialists Association of Malaysia (Perdasama) president Mohd Azamanizam Baharon said they were supportive of the government’s move to put a stop to the misuse of diesel subsidies.
“This, in turn, can help improve the lives of people by providing better infrastructure, education and healthcare.
“We also hope that the direct impact from this subsidy savings can help many bumiputra in developing their businesses,” he said.
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Peninsular Malaysia Logistics Entrepreneur Association Dr Puvaneaish Subramanian said they would await for more details from the Domestic Trade and Cost of Living Ministry on the Subsidised Diesel Regulation System Pilot Project (SKDS) in which selected types of public transportation and goods vehicles would continue to enjoy subsidised diesel.
“We want to know about the subsidy allocation for all transporters and logistic players.
“The announcement put us in a gray area where we don’t quite understand the number of petrol companies that are issuing us the fleet card (for the subsidies).
“A number of our members are still waiting for the subsidy card,” she added.
SME Association of Malaysia secretary-general Chin Chee Seong described the diesel increase as “too much”.
“The increase in diesel prices will certainly put pressure and burden on business operators.
“It will leave widespread effects on the entire supply chain, leading to price increases across various sectors, from agriculture to light industries,” he said.
Chin spoke of a possibility of another round of inflation as many businesses did not get the fleet cards that offer diesel subsidies.
“Most SMEs (small and medium-sized enterprises) will be particularly impacted, but even large companies will feel the strain.
“As costs continue to soar, businesses will have no choice but pass on the burden to consumers by raising prices,” he said.
