Transport groups seek monthly quotas as govt reviews diesel subsidy

 With diesel prices at an all-time high, Putrajaya says it is studying a mechanism to distribute diesel subsidies via the MyKasih system in tandem with MyKads.

The transport sector is tied closely to to the construction industry, meaning higher prices will have a spillover effect on other sectors of the economy, says an industry player. (Bernama pic)

PETALING JAYA:

 Industry players have welcomed the government’s move to consider targeted diesel subsidies, proposing a monthly subsidy of about 300 litres for pickup trucks and up to 1,000 litres for lorries.

Danial Chan, vice-president of the Federation of Motor and Credit Companies Association of Malaysia, said small businesses are reporting lower margins as they rely heavily on diesel-powered vehicles for their operations.

With a full tank of diesel now costing between RM500 and RM600, Chan said a subsidy would help cushion the impact of rising diesel prices.

He also called for the implementation of a mechanism similar to the BUDI95 scheme for subsidised RON95 petrol, saying it could help stabilise demand for diesel vehicles while supporting small businesses.

“Diesel users should be entitled to targeted subsidies, just like petrol users. This will help boost vehicle sales and reduce operating costs,” he told FMT.

Unsubsidised diesel is currently being sold at RM6.72 per litre in West Malaysia until April 15, a 70 sen increase from RM6.02 per litre in the past week.

Fuel prices have skyrocketed due to the Iran war, but diesel sold in East Malaysia remains at the heavily-subsidised price of RM2.15 per litre.

Government spokesman Fahmi Fadzil recently said Putrajaya was studying a mechanism to distribute subsidies — including for diesel — using the MyKasih system in tandem with MyKads.

He said the finance ministry would refine the mechanism before presenting it to the Cabinet for approval.

Spillover effect

Tipper Lorry Operators Association president Michael Loo said the sector is closely tied to the construction industry, transporting materials such as sand, cement, aggregates, quarry products and rare earth.

“It is a major contributor to the economy. If we are affected, there will be a spillover effect,” he said, adding that operators may be forced to reduce trips to cut costs.

He warned that such disruptions could eventually affect construction workers through reduced working hours.

Loo welcomed the government’s review of the diesel subsidy and urged Putrajaya to act swiftly. He proposed a subsidy of up to 1,000 litres of diesel per month for lorries, noting that their daily usage typically ranges from 150 to 200 litres.

“We are not asking for a full subsidy. We understand these are challenging times and are willing to share the burden. However, we hope the government will also step in with some form of support,” he said.

“Rather than waiting until it is too late, action must be taken now. The government needs to strike a balance.”

Meanwhile, the Association of Malaysian Hauliers said its members are still covered under the subsidised diesel control system (SKDS).

Its president, Soo Chee Yeong, said most commercial transport operators are currently paying about RM2.15 per litre under SKDS, and have not been significantly affected by the recent diesel price hikes.

On Thursday, an express bus operator urged the government to increase the monthly diesel subsidy quota for express buses using fleet cards from 6,000 litres to 10,000 litres.

Konsortium E-Mutiara Bhd CEO Che Ibrahim Che Ismail said his company’s current quota of 6,000 litres lasts only for about 20 days, Harian Metro reported. - FMT