Targeted diesel subsidy rollout planned for 2Q

KUALA LUMPUR: A targeted diesel subsidy system is planned for a rollout in the second quarter of this year, according to the Domestic Trade and Cost of Living Ministry.

A pilot project is being carried out among selected companies to receive their diesel quotas through a fleet card from Feb 1, it said.

This will involve six goods transportation companies which will see their Skid Tank quotas expiring this month.

The companies are: Perceptive Logistic Sdn Bhd, Multimodal Freight Sdn Bhd, Mun Chuen Transport Sdn Bhd, Tan Swee Hee Sdn Bhd, Sim Yew Enterprise Sdn Bhd and Rantau Panjang Haulage Sdn Bhd.

The government will implement the Diesel Subsidy Control System 2.0 (DSCS 2.0) which will see the reallocation of subsidies.

The reallocation of the subsidies would also benefit the goods sector, it said.

The DSCS monitors the allocation of subsidised diesel quota to four sectors – the public transport, land logistics, river transporters and the boats/ferries which connect to the country’s key islands.

“The new fleet card mechanism is part of the government’s efforts to digitise systems to control subsidised goods under the ministry.

“The companies involved may apply for their quotas through the MySubsidi Diesel KPDN System and then proceed to apply for the fleet card from their preferred diesel company,” it said.

The ministry said the expansion of the use of the fleet card to the goods sector under the DSCS 2.0 would help improve the controls to only benefit targeted vehicles.

The expansion to the goods sector would also help stave off the issue of the rising cost of goods when the targeted diesel subsidy system is rolled out, it said.

“This will prevent smuggling and wastage of subsidised diesel in a more efficient and effective manner with the use of technology,” it added.

Digitisation will also help reduce the cost of monitoring and enforcement that is being carried out physically, it noted.

According to government data cited by Prime Minister Datuk Seri Anwar Ibrahim, the sale of subsidised diesel rose by up to 40% since 2019 while the total number of diesel powered vehicles only rose by less than 3%, which implied an ongoing and serious smuggling activity.