Govt warns firms against ‘channel switching’ in fuel purchases

 Finance minister II Amir Hamzah Azizan denounces companies that buy fuel at subsidised pump prices instead of at market prices as required.

Finance minister II Amir Hamzah Azizan said the price gap between market rates and subsidised diesel has made practices such as ‘channel switching’ attractive.

PETALING JAYA:

 Putrajaya has warned companies against abusing fuel subsidies, including through “channel switching”, and said enforcement will be stepped up amid the ongoing global energy crisis.

Finance minister II Amir Hamzah Azizan denounced the practice, in which companies that are required to buy fuel at market prices purchase it at subsidised pump prices instead.

“The government warns these companies to stop channel switching or face appropriate action,” he said in a televised briefing on the global energy crisis today.

Amir said the price gap between market rates and subsidised diesel has made such practices attractive, but stressed that it placed additional strain on public finances.

“Market prices range between RM7 and RM8, significantly higher than the RM6.72 diesel price at petrol stations, part of which is still absorbed by the government,” he said.

He also thanked the public for reporting misconduct to the authorities, including cases involving foreigners illegally purchasing RON95 petrol.

“It is this spirit of unity that will help us face this crisis,” he said.

The crackdown comes as the government’s fuel subsidy bill has surged following rising global oil prices, driven by supply disruptions linked to the Middle East conflict. - FMT