KOTA KINABALU, June 23 — The federal government’s new MyKad-based targeted diesel subsidy system is expected to curb abuse and smuggling in the subsidised fuel supply chain, with authorities estimating savings of up to one billion litres of diesel annually.
Finance Minister II Datuk Seri Amir Hamzah Azizan said the new mechanism, which takes effect in Sabah, Sarawak and Labuan on July 1, would link subsidised diesel purchases directly to eligible Malaysian citizens through their MyKad.
“We estimate that the implementation of this system can reduce leakages by as much as one billion litres of diesel per year. Besides reducing the government’s subsidy burden, it will also help ensure a more stable domestic diesel supply,” he told reporters after a briefing on the targeted diesel subsidy programme at the Sabah International Convention Centre here.
He said the previous system lacked comprehensive identity verification, allowing subsidised diesel to be bought openly and creating room for leakages and abuse.
He added that diesel leakages were especially high in Sabah due to the strong demand for four-wheel-drive vehicles, which are widely used for long-distance travel in the state.
Under the new mechanism, eligible Malaysians will continue to enjoy subsidised diesel prices, while non-citizens will have to buy the fuel at market rates.
According to data from Op Tiris 3.0, authorities recorded 554 petrol and diesel smuggling cases nationwide between January and June this year, with 291 cases in Sabah, Sarawak and Labuan.
Amir Hamzah said each eligible individual would receive a basic monthly quota of 200 litres for subsidised fuel purchases, covering both RON95 petrol and diesel.
He said government data showed that nearly 90 per cent of motorists in Malaysia use less than 200 litres of fuel a month, making the quota sufficient for most users.
For Sabah, Sarawak and Labuan, where many consumers rely on pickup trucks and four-wheel-drive vehicles, eligible owners of such vehicles will receive an additional 100 litres a month, bringing their total quota to 300 litres.
“Based on current consumption data, an estimated 95 per cent of diesel users consume less than 300 litres per month,” he said.
Amir Hamzah added that the government was also finalising assistance for other groups who depend on diesel for their livelihoods, including river boat operators and users of generator sets in rural and remote areas.
“A specific mechanism for these groups is currently being finalised to ensure they continue receiving appropriate assistance,” he said.
