Industry leaders call for phased cut in diesel subsidies

 

Khairul Annuar Abdul Aziz proposes that diesel subsidies be scaled back by no more than 10 sen per litre each month. (Facebook pic)

PETALING JAYA: Industry players have applauded the government’s move to rationalise diesel subsidies, but are urging that it be carried out incrementally over time.

Petroleum Dealers’ Association of Malaysia (PDAM) president Khairul Annuar Abdul Aziz said a gradual increase in diesel prices would give dealers time to rebuild their capital and offset costs due to inflation.

“We believe that the increase in price should be on a monthly basis, with a maximum of 10 sen per litre each month,” he said.

Tabling Budget 2024 on Oct 13, Prime Minister Anwar Ibrahim announced that diesel subsidies would be rationalised in phases, with an exemption given to logistics companies.

However, Khairul noted that there was no mention of diesel subsidies for private vehicle owners.

“I think the government needs to explain more so it does not create feelings of discontent,” he said.

He said the government should use the Padu database to identify people in the B40 and M40 communities eligible for diesel subsidies.

Association of Malaysian Hauliers (AMH) president Soo Chee Yeong said haulier companies would benefit from the diesel subsidies as Malaysia is a competitive international logistics market.

He agreed that the government should only subsidise selected consumers to combat smuggling.

Soo said Malaysia’s economy has been too dependent on diesel subsidies, so cuts and a change to targeted subsidies cannot be too aggressive.

“We need an interim period for everyone to get used to it, perhaps reducing it (diesel subsidies) by 15% to 20% annually so that it would be better accepted by everyone,” he said.

He also suggested reallocating the savings to support economic development.

“Savings from the diesel subsidies can be utilised in many other ways such as improving import and export infrastructure, pushing digitalisation for all government departments to simplify business processes, as well as to attract more foreign direct investment and local commercial development,” he said. - FMT