Cabinet agrees to implement targeted fuel subsidies, starting with diesel in the peninsula – PM Anwar

Prime minister Datuk Seri Anwar Ibrahim.says that the government will proceed with the implementation of targeted fuel subsidies, with the Cabinet having agreed to the move, The Star reports.

He said that the implementation would first begin with diesel in the peninsula, with that for Sabah and Sarawak to be set aside until later. This was because almost everyone in Sabah and Sarawak uses diesel for transportation every day. “So, we will postpone this move there,” he said in his speech, which was televised live last night.

Anwar said that in order to prevent any drastic increases in the cost of goods and services, subsidies will be given to traders using diesel-powered commercial vehicles under the subsidised diesel control system (SKDS) programme, essentially covering 10 public transportation vehicle and 23 goods transport vehicle types.

Cash aid will also be given to eligible individuals such as small traders and farmers who own private diesel-powered vehicles, while.diesel subsidies will continue to be provided to certain categories of fishermen.

As such, the PM said that lower- and middle-income groups who use diesel for their businesses will not be affected by the rationalisation, which is expected to save the government around RM4 billion annually, and that the only people who would be impacted by the rationalisation is the T20 group and around 3.5 million foreigners.

Anwar however did not indicate when the diesel subsidy rationalisation would be implemented. The government has previously outlined plans to introduce a targeted subsidy mechanism for both diesel and RON 95 petrol, with that for the latter slated to be sometime in the second half of 2024. However, it has yet to announce the mechanism and how these subsidies will be dispensed.

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