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Sales of retail diesel in Malaysia sees 30% reduction after subsidy rationalisation: finance minister II – paultan.org

Sales of retail diesel in Malaysia sees 30% reduction after subsidy rationalisation: finance minister II – paultan.org


Retail sales of diesel at petrol station in Malaysia has seen a 30% decrease in the first week since the subsidy rationalisation took effect on June 10, reported New Straits Times.

This was equal to a reduction of eight million litres of diesel a day compared with the previous week, said finance minister II Datuk Seri Amir Hamzah Azizan during a ministerial explanatory session in the Dewan Rakyat. Meanwhile, commercial sales of diesel, or that purchased by companies at the unsubsidised market rate, increased by four million litres in the same period, he said.

This indicated that some companies which should have purchased diesel at market prices had previously bought diesel at the subsidised, retail rate, the minister said. “The upward trend in commercial diesel sales is also positive as it indicates a reduction in subsidised diesel leakages,” he added.

An oil company had informed the authorities that sales of diesel fuel at petrol stations near national borders have dropped by 40%, Amir Hamzah said. “This information was obtained from an oil company, which has provided additional evidence of diesel smuggling into neighbouring countries,” the minister added.

Sales of retail diesel in Malaysia sees 30% reduction after subsidy rationalisation: finance minister II

The minister also said that Malaysia’s diesel subsidy expenditure had increased ten-fold, from RM1.4 billion in 2019 to RM14.3 billion in 2023, stating that the increase in subsidy expenditure was not solely due to market price increases, but also due to the increased consumption of subsidised diesel.

“The amount of subsidised diesel used has surged by approximately 80 per cent, from 6.1 billion litres in 2019 to 10.8 billion litres in 2023, despite no significant increase in new diesel vehicles during the same period. During this period, the sales volume of unsubsidised commercial diesel had decreased by two billion litres,” the minister said.

Rationalisation of the diesel fuel subsidy which took place on June 10 saw the price of Euro 5 B10 and B20 diesel in Peninsular Malaysia increase by RM1.20, or 56% from its subsidised rate of RM2.15 per litre, to RM3.35 per litre, while the Euro 5 B7 grade of diesel held the same 20 sen price margin above the B10 and B20 grades, now priced at RM3.55 per litre.

Financial assistance to users of diesel fuel is now dispensed through the Budi Individual and Budi Agri-Commodity categories, through which eligible applicants will receive cash assistance of RM200 every month. Meanwhile, larger-scale land transport and logistics operators may apply for the subsidised diesel control system (SKDS) 1.0 and 2.0 schemes, which currently covers a total of 33 types of diesel-powered land transport vehicles.

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Sales of retail diesel in Malaysia sees 30% reduction after subsidy rationalisation: finance minister II – paultan.org
Sales of retail diesel in Malaysia sees 30% reduction after subsidy rationalisation: finance minister II – paultan.org

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