The implementation of the diesel subsidy rationalisation is expected to enable savings of between RM7.2 billion and RM7.5 billion for the government, up from the initial RM4 billion projected in July 2024.
Finance Minister II Datuk Seri Amir Hamzah Azizan said that this is due to better implementation of the diesel subsidy rationalisation, causing monthly savings of up to RM600 million after its successful implementation.
“We are doing much better because the (diesel) leakage was much more than what we expected and that is only in Peninsular Malaysia for now,” he said.
Amir Hamzah noted that the government had crucial issues to consider when implementing the diesel subsidy rationalisation.
“We knew that for the leakages, we were going into two major segments – mainly from the retail to commercial sector and the leakages involving people crossing the border.
“When we put in the system that actually reduced the risks of leakages, that’s why we were able to roll it. We got better results as we have been able to reduce cross-border leakages,” he added.
In December 2024, the retail price of diesel in Peninsular Malaysia stood at RM2.95 per litre and RM2.15 in Sabah, Sarawak and Labuan. It was said that the prices were fixed based on the weekly retail prices of petroleum products using the Automatic Pricing Mechanism formula.
Meanwhile, Amir Hamzah highlighted that the Finance Ministry and the Economy Ministry are still in the midst of working out the mechanism for the RON92 petrol subsidy rationalisation, which is set to be implemented this year using the same principles as diesel.
“(There will be) two-tier pricing, looking at protecting 85% of the population so that they will be left untouched along the way. First is the (income) threshold that we cut people on. Second is the methodology, like what we have done in diesel that will allow us to effectively manage.
“Going forward, I think in the next couple of months, you will see that one clarified,” he said.