Malaysia has set the new ceiling pump price of diesel in Peninsular Malaysia to RM3.35 per litre, up from RM2.15 per litre previously. This is effective from midnight of June 10, 2024.
Why was this announced?
- This is part of the Malaysian government’s plan to stop leakages in subsidised diesel. It believed that this will save around RM4 billion in government spending each year.
According to Second Finance Minister Datuk Seri Amir Hamzah Azizan during the announcement on June 9, 2024:
“The amount of subsidised diesel increased sharply from 6.1 billion litres in 2019 to 10.8 billion litres in 2023 although the number of diesel powered vehicles did not increase significantly.
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“This shows that the subsidy given was leaking, and could not be benefitted by the target group.”
Second Finance Minister Datuk Seri Amir Hamzah Azizan speaks to the media during the press conference regarding the diesel subsidy targeting in Putrajaya on June 9, 2024. — Picture by Shafwan Zaidon
Will this affect me?
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- This only applies to Peninsular Malaysia, for now.
- If you are a private owner of a diesel vehicle, you may be eligible for the Budi MySubsidi Diesel programme. More information on this below.
- If you are a company using diesel vehicles for public transportation, school buses, local buses, express buses, ambulances, firefighters. hearses and logistics, you can apply for the Subsidised Diesel Control System (SKDS) fleet card.
According to Amir Hamzah, the leakages — which happened through illegal consumption or smuggling of diesel fuel to neighbouring countries — were due to Malaysia’s relatively cheap price of fuel. Even after this new price was announced, Malaysia’s price of diesel is among the lowest in the region.
See Malay Mail’s chart here for comparison:
How was this new price set?
- It is the unsubsidised market price based on the May 2024 average according to the Automatic Pricing Mechanism formula, according to Amir Hamzah.
Is this covered by the Budi Madani, or the Madani Subsidy Assistance Programme, launched in May 27, 2024? The Ministry of Finance has provided several infographics on the MySubsidi Diesel programme under Budi Madani.
Have a diesel vehicle?
- If you are a Malaysian citizen with a household income below RM100,000 per year — you can get RM200 aid each month.
- If you’re part of a company with any of the 33 types of vehicles listed below — you can apply for the SKDS fleet card. There is no deadline to apply.
For more information and to apply for this programme, go to budimadani.gov.my.
However:
In May 2024, several academics have expressed concern about the potential repercussions of subsidy rationalisation on the country’s elderly population, since they depend on a fixed income, among others.
Monash University Malaysia’s economist Sharon Koh said:
“When prices go up, the end consumers, often the elderly are usually the hardest hit. They have limited incomes, and if the cost of essential goods like vegetables rises, their quality of life deteriorates.”
Need to know more?
- Haven’t received your fleet cards yet? Minister of Domestic Trade and Cost of Living Datuk Armizan Mohd Ali said just keep your receipts first. [Read more]
- This move was announced by Prime Minister Datuk Seri Anwar Ibrahim back in May 21, 2024 after the Cabinet agreed on it. [Read more]
- Amir Hamzah said the government will work harder to help Malaysians, especially farmers, to understand the rationalisation of diesel subsidies. [Read more]