Diesel subsidy rationalisation aimed at rich, foreigners: Anwar

THE cabinet has today agreed on the implementation of targeted subsidy on fuel, Prime Minister Anwar Ibrahim said.

This subsidy rationalisation will mean not everyone will enjoy fuel subsidy as is the case now.

Anwar said foreigners and the T20 group will be excluded.

He said the targeted fuel subsidy will be first implemented on diesel.

He also stressed that the targeted diesel subsidy will only be implemented in the peninsula initially, while those in Sabah and Sarawak will not be affected.

“Almost every family in Sabah and Sarawak uses diesel for their vehicles.

“So, we postpone any action because it will be inconvenient for most people,” Anwar said in a speech that was televised live nationwide.

Anwar said that the government could save up to RM4 billion per year with the implementation of the targeted subsidy for diesel.

The start date on the targeted subsidy for diesel will be announced by the finance minister II soon.

“I acknowledge that any implementation of the targeted fuel subsidy should not burden the people at most.

“If you ask why it is necessary (to implement targeted fuel subsidies), it is because we cannot afford to subsidise the super rich and foreigners,” Anwar said.

However, despite its blanket implementation in the peninsula, Anwar said that the government will continue to provide subsidies to traders who use diesel-powered commercial vehicles.

“This is done to curb the increase in the prices of goods and services.

“Hence, (the subsidy) will be (continued) to be provided for 10 types of public transport vehicles and 23 types of goods transport vehicles under the subsidised diesel control system.

“Meaning bus operators, taxis, and fishermen will continue to receive subsidies or aid to help them.

“The government also has agreed to provide cash assistance to eligible individual owners of diesel vehicles, apart from the ones I mentioned earlier like smallholder farmers, paddy farmers, and smallholder traders.

“This means that the B40 and M40 that use diesel facilities for small businesses, agriculture, mining, farming and fishermen will continue to be helped,” he said.

Anwar said that the savings from the implementation of the targeted fuel subsidy for diesel can be used to improve the aid given to Malaysians.

“The Sumbangan Asas Rahmah (SARA) was improved by increasing the allocation to RM700 million, which is five times more than the RM139 million allocated last year.

“We’ve also increased the number of its recipients to 700,000 and also increased the aid to RM1,200 instead of RM600.

“We’ve also increased the Rahmah Cash Aid (STR) allocations to RM10 billion, a rise of RM2 billion from 2023, benefitting approximately 9 million recipients or 60% of Malaysia's adult population.

“From where can we get (funds) to increase the aid? By saving from the subsidy,” he said. – May 21, 2024.