Malaysia just abolished its diesel fuel subsidy, and will float diesel prices on a monthly basis! Here is what you need to know…
Subsidy Removed : Diesel To Cost RM3.35 On June 10!
On 9 June 2024, Malaysia Finance Minister II Datuk Seri Amir Hamzah Azizan announced that diesel prices will be floated on a monthly basis, abolishing the diesel fuel subsidy at least in Peninsula Malaysia.
Based on the Automatic Pricing Mechanism formula for the month of May, diesel will be priced at RM3.35 per litre starting midnight on Monday, June 10, 2024.
Currently, Euro 5 diesel (B10) is sold at the subsidised price of RM2.15 per litre, whereas so the new, unsubsidised price of RM3.35 per litre is about 55.8% higher. Those using B7 diesel will pay RM3.55 per litre, up from the current RM2.35 per litre – up by 51%.
While the diesel subsidy will remain in place for Sabah and Sarawak, it will eventually be removed. The Finance Minister II said that the “rationalisation” of the diesel subsidy will be implemented in Sabah and Sarawak later.
Recommended : BUDI MADANI Diesel Subsidy Scheme Explained!
Cutting this diesel subsidy is expected to save the government about RM4 billion (about US$850 million a year) – or about 0.2% of its GDP, and help to achieve the goal of the Fiscal Responsibility Act (FRA) to reduce the debt level so that it does not exceed 60% of the GDP, with a fiscal deficit of between 3.5% and 3% by 2025.
Instead of providing a direct subsidy of diesel fuel, Malaysia has announced a new diesel subsidy scheme called BUDI MADANI, which is much more limited, and targeted.
In addition, the government will continue to provide subsidies for farmers and traders using diesel-powered commercial vehicles, and public transportation. Ten types of public transportation vehicles, including buses and taxis, as well as 23 types of goods transport vehicles, will be subsidised under the Subsidised Diesel Control System (SKDS)
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Dr. Adrian Wong has been writing about tech and science since 1997, even publishing a book with Prentice Hall called Breaking Through The BIOS Barrier (ISBN 978-0131455368) while in medical school.
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