Govt not applying one-size-fits-all diesel subsidy policy, says economist

 Nasir Saukani of UKM notes that commercial transport, including in Sarawak, remains supported through the subsidised diesel control system.

Nasir Saukani said a lorry driver’s use of more than 2,000 litres a month for long-haul deliveries would qualify as commercial use, and would not fall under the 200-litre limit for private vehicles.

PETALING JAYA:

The government’s Budi Diesel programme, which caps purchases for private vehicle owners at 200 litres per month, balances fuel supply with Sarawak’s unique circumstances, says an economist.

Nasir Saukani of Universiti Kebangsaan Malaysia (UKM) said there were legitimate grounds for concern over the suitability of a 200-litre monthly cap for Sarawak, given the state’s distances, cost of logistics and heavy reliance on diesel transport. However, he added, the “most important point is also the one most easily missed”.

“The criticism assumes the government is applying a single blunt rule to everyone, but the reform does the opposite.

“It is deliberately differentiated, with separate treatment for commercial operators, individual owners and small businesses, precisely because their needs are different,” he said in a statement to FMT.

Nasir pointed out, for example, that a lorry driver’s use of more than 2,000 litres a month for long-haul deliveries would qualify as commercial use and would not fall under the 200-litre limit for private vehicles.

“Commercial transport is supported through the subsidised diesel control system (SKDS), which sets eligibility according to the actual size and operating needs of the vehicle.

“The relevant question was never whether 200 litres is enough for a lorry. It is whether each user is on the right track.

“Importantly for Sarawak, that scheme has now been extended to the state, covering more than 70,000 additional vehicles and 33 vehicle types, including the rigid lorries and prime movers that carry goods across the interior,” he said.

Nasir also argued that there are no “painless” alternatives to the current diesel subsidy programme, saying that tight physical supply of fuel and rising global prices meant “hard trade-offs”.

“In a shortage, spreading support thinly across the board does not create more diesel. It simply adds pressure and risks pushing prices higher.

“Directing limited support to genuine need, as in commercial transport, essential distribution and the most vulnerable, is what actually protects people and stretches the supply we have.

“The government is working within real constraints and trying to keep enough fuel flowing to those who depend on it most,” he said.

Nasir was responding to social activist Voon Shiak Ni, who previously said that extending the diesel subsidy policy to Sarawak in its current form would fail to reflect the state’s significant transportation and logistical challenges.

From July 1, about 700,000 eligible private diesel vehicle owners nationwide will be able to buy subsidised diesel at RM2.10 per litre under the Budi Diesel programme.

Under the new mechanism, buyers must use their MyKad to access subsidised diesel purchases, which are capped at 200 litres per month. Pickup truck and four-wheel-drive vehicle owners may apply for an additional quota of 100 litres. - FMT