Govt focusing on targeted diesel subsidy for now, says Amir Hamzah

KUALA LUMPUR: The government is focusing on the implementation of the targeted diesel subsidy initiative before it decides to move to other related matters, says Datuk Seri Amir Hamzah Azizan.

“We are only focusing on (targeted) diesel subsidy for now and once there is stability, we will look at what next that can be done," the Finance Minister II told reporters on the sidelines of the Sasana Symposium here today.

He was responding to questions on when targeted subsidy implementation for RON95 petrol would take place.

Amir Hamzah said diesel subsidy reforms are not taken lightly by the government and need to be well thought out.

“It is very important to think about how we can do this and how it will impact the people.

"The reform agenda under the Madani framework is aimed at building Malaysia’s future and reducing the fiscal deficit so we can reinvest back into things that are important,” he said.

Amir Hamzah said the targeted subsidy policy was done to cushion its impact on the prices of consumer items.


It is also aimed at keeping profiteering at bay, while protecting the vulnerable segments of society from price hikes. Over time, there has been leakage of subsidies caused by the smuggling of petroleum products and subsidies enjoyed by sectors who do not deserve them, he said.

Amir Hamzah also said there has been a drop in the purchase of diesel at fuel stations located at the country's borders following the implementation of the diesel subsidy rationalisation. It meant that the government's initiatives were working, he added.

He said the government wants to help sensitive sectors which use diesel and asked those who had not applied for Subsidised Diesel Control System (SKDS) 2.0 to do so.

"Operators of public vehicles like school buses, ambulances and others will still receive subsidies. We’re doing this to control the overall impact,” he added.

He added should those that have the SKDS 2.0 reach their quota, the government will be ready to hold further discussions on it.

“Any sector that qualifies for the subsidies and has reached their limit can discuss with the government. If there is sufficient data to show this, we can help them,” he said.

The government announced that the retail price of diesel in Peninsular Malaysia has been set at RM3.35 per litre effective June 10 under the targeted subsidy system.

SKDS is a specific platform for selected public and goods vehicles to continue receiving diesel subsidies through the fleet card.