PUTRAJAYA, May 30 — The perception that the government has decided to abolish diesel subsidy is incorrect, as the subsidy was only retargeted to address the long-standing issue of subsidy leakage resulting from the bulk subsidy approach.

Minister of Domestic Trade and Cost of Living Datuk Armizan Mohd Ali explained that diesel subsidy is now targeted through two methods namely through retail price subsidy at petrol stations for 33 types of public and goods transportation via the Subsidised Diesel Control System (SKDS), and a cash assistance subsidy of RM200 for households using diesel vehicles for individuals or agri-commodity through the Madani Subsidy Assistance (Budi Madani).

“I want to correct the perception that the government wants to abolish diesel subsidy...we (the government) have not abolished them but have targeted them through these two methods,” he told a press conference after attending the SKDS 2.0 Open Day here today.

Last Monday, the Ministry of Finance (MOF) announced that the implementation of Budi Madani programme complements the existing government efforts in targeting diesel subsidy through the MySubsidi Diesel system managed by the Ministry of Domestic Trade and Cost of Living (KPDN).


The Budi Madani programme is specifically for private diesel vehicle owners, including individuals, farmers and smallholders from the B40 and M40 groups in Peninsular Malaysia, while SKDS involves 23 types of goods transportation, aimed at providing a mechanism for retargeting diesel subsidy.

On the mechanism for targeted diesel subsidies, Armizan said that this matter falls under the jurisdiction of the MOF and will be announced by the ministry when the time comes.

Regarding diesel prices in Sabah, Sarawak, and Labuan, the minister clarified that fuel prices would remain the same in these three locations after the targeted subsidy implementation in Peninsular Malaysia.


“Sabah and Sarawak (including Labuan) are exempted from this initiative because the government wants to plan carefully and systematically to minimise the impact on the people.

“Household dependence on diesel in Sabah, Sarawak, and Labuan is quite high due to the geographic factors there,” he said. — Bernama