KUALA LUMPUR (April 20): Approved road transport logistics companies will obtain “fleet cards” from select fuel retailers to purchase subsidised fuel under the diesel subsidy rationalisation programme, the Ministry of Finance (MOF) said.

In a social media post, the MOF said it, together with the Ministry of Domestic Trade and Cost of Living (KPDN), will roll out the mechanism under the Subsidised Diesel Regulation System Pilot Project 2.0 (Projek Rintis Sistem Kawalan Diesel Bersubsidi or SKDS 2.0).

Applications can be made at https://mysubsidi.kpdn.gov.my, the post said.

“Yesterday (April 19), Treasury Secretary General Datuk Johan Mahmood Merican held talks with the logistics industry [players] regarding the implementation of a targeted subsidy programme for diesel.

“This discussion is to obtain the views of associations and logistic companies regarding the scopes and conditions of the proposed programme, particularly to listen to the issues faced [by them] and steps for improvements,” the post said.

This round of applications on the KPDN website has been open to logistics companies in Peninsular Malaysia since March 7, the website showed.

It is open to nine types of vehicles, namely lorries carrying common cargoes, bottled drinks, or frozen goods, as well as luton lorries, water tankers, panel vans, and window vans, according to a March report by Bernama.

As for Sabah and Sarawak, it was reported in February that KPDN will hold discussions with the two state governments before the implementation of any diesel subsidy retargeting programme there.

Expectations are for the diesel subsidy rationalisation to happen this year, based on the timeline provided by Economy Minister Rafizi Ramli in recent news reports. This will be followed by subsidy rationalisation for RON95 petrol.

The MOF, in the social media post, reiterated that the subsidy rationalisation is conducted to avoid leakages and continued smuggling of the subsidised items while reducing the impact on the prices of goods by providing subsidised diesel for the aforementioned logistics companies.

It was reported that leakages from subsidised diesel smuggling - bought from fuel retailers for use in commercial operations like construction, or to be sold in neighbouring countries - topped RM11 billion in 2022, Prime Minister Datuk Seri Anwar Ibrahim said during Budget 2023.

Malaysia’s subsidy bill is seen at RM58.65 billion in 2023, double the levels seen in 2015-2021 due to the rise in oil prices and the continued subsidy for retail fuel products.

https://www.theedgemarkets.com/node/708713