Anwar Ibrahim Announces Diesel Subsidy Rationalisation

Anwar Ibrahim addressed the nation last Tuesday, and during the address he announced that the long planned subsidy rationalisation will start with diesel.

Fuel subsidy rationalisation will start with diesel

“This morning, the cabinet of ministers have agreed to execute the rationalisation of subsidy for diesel, and we are discussing the next appropriate action,” said Anwar in his address.

According to the speech, the fuel subsidy rationalisation will start with diesel, before involving other forms of fuel such as RON95. Anwar also detailed that the exercise will only apply to users in Peninsula Malaysia, and will not include Sabah and Sarawak.

“The reason for this is due to the fact that in Sabah and Sarawak, almost all families have a diesel powered vehicle for their daily use. Therefore, the diesel fuel rationalisation will be postponed so that it will not burden the majority of the people there,” said Anwar.

In order to avoid any extreme increase of cost of goods, several measures have also been announced by Anwar, including targeted diesel subsidies for commercial consumers, which includes taxi and bus operators.

The targeted diesel subsidy will be given under a programme called the Sistem Kawalan Diesel Bersubsidi (SKDS), which will cover the diesel subsidy for 10 types of public transport vehicles, and 23 types of logistical vehicles.

Subsidy will also be replaced by cash handouts

Anwar also stated that along with SKDS, cash handouts will also be given to other groups who might be affected by the diesel subsidy rationalisation, such as farmers, small business owners, and individual diesel vehicle owners except those who belong to the T20 income group.

“Therefore, the only groups that will be affected by the subsidy rationalisation will be those who belong to the T20 income group, and foreigners,” said Anwar.

Anwar also added that the savings from the diesel subsidy rationalisation, which is estimated to be at around RM4 billion, will be rechannelled towards other public initiatives such as the Sumbangan Asas Rahmah (Sara) programme, which will now see RM700 million allocation — five times its initial allocation of RM130 million — and set to benefit 700,000 Malaysians at RM1,200 each.

Catch the rest of the address right here;