Sun. Jul 14th, 2024


By Vaseline May31,2024

PUTRAJAYA, May 31 (Bernama) – The estimated savings of RM4 billion from the targeted implementation of diesel subsidies is expected to give the government greater fiscal space in efforts to increase the quality of various services important to the people.

Finance Minister II Datuk Seri Amir Hamzah Azizan said RM81 billion was spent on subsidies and social services in 2022, with the amount falling to less than RM70 billion last year.

“Therefore, if we were to set aside RM307 billion in the budget for operational expenditure, there would be less room to spend on more important things for the future.

“The implementation of targeted diesel subsidies is intended to ensure greater fiscal space,” he said recently during an information session with senior editors from the Ministry of Finance.

Improve the quality of services and ensure people’s well-being

Amir Hamzah said the savings could then be spent on managing the land, especially to improve the services people need, including infrastructure such as roads and schools, as well as healthcare services such as clinics and medicines.

“What we gain (from the savings) will be used to increase the (quality of) services for the people. If we do not implement the targeted diesel subsidy, we will not have the savings and it would be difficult for the government to improve service delivery in the country,” he added.

Amir Hamzah said the targeted diesel subsidy will also be implemented using the best mechanism and focus on the target groups in need of assistance.

“We provide (subsidies) in the right sectors, and the savings (we get) will be plowed back into infrastructure, schools and whatever services the government should implement. This is part of the government’s (ongoing) efforts,” he added.

Subsidy distribution through BUDI MADANI

Explaining the targeted channelization of the subsidy called “Budi MADANI”, he said it covers five areas: public transport, fishermen, selected commercial vehicles under the Subsidized Diesel Control System (SKDS 2.0), individuals and farmers including smallholders.

A total of 700,000 diesel vehicle owners will benefit from BUDI MADANI, representing approximately half of the active diesel vehicles in Peninsular Malaysia.

Of the 700,000 BUDI MADANI recipients, 300,000 diesel vehicles are privately owned and the rest are commercial vehicles.

Since 2013, the Ministry of Domestic Trade and Cost of Living (KPDN) has been leading the governance-related implementation at a special rate different from gas station retail prices. This implementation uses the SKDS 1.0 with fleet maps issued by oil companies with 10 types of public transport vehicles.

As of March 7, 2024, the implementation of this system was expanded through SKDS 2.0 Phase 1 to include an additional nine types of freight transport vehicles. This was expanded to SKDS 2.0 Phase II, involving a further 14 other truck types.

Last Monday (May 27), the Ministry of Finance said the implementation of the MADANI, or BUDI MADANI Subsidy Assistance Program, involves private owners of diesel vehicles for private individuals, smallholders and small farmers.

The BUDI MADANI program complements existing government efforts to target diesel subsidies through KPDN’s MySubsidy Diesel system; SKDS is a program under MySubsidy Diesel.

Under BUDI MADANI, cash support of RM200 per month will be given to private diesel vehicle owners for private individuals, small farmers and smallholders.

Amir Hamzah added that according to a survey by the Bureau of Statistics Malaysia, this monthly aid is expected to be enough to cover the increase in diesel prices based on vehicles driving up to 60 kilometers daily, thus meeting the needs of most individual diesel vehicle owners. .

He said recipients of subsidized diesel, such as the logistics sector, street vendors and small traders, should view the government subsidy as a trade-off not to increase the price of goods or services.

“The government, together with KPN, will continue to intensify operations to combat profiteering,” said Amir Hamzah.


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