KUALA LUMPUR: Industry players are urging the government to broaden the scope of the Subsidised Diesel Control Scheme (SKDS), which is currently limited to public transport, including buses, taxis, and 23 types of commercial goods vehicles. 

Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said while it welcomed the move to include commercial goods vehicles in the scheme, it was however "too limited" as companies with vehicles such as tankers carrying chemicals, construction materials, fertiliser, among others, would not be eligible for subsidised diesel. 

"Presently, commercial vehicle operators are paying float (market) prices for diesel, but through the SKDS 2.0, these operators can now apply to benefit from subsidised diesel.

"FMM has encouraged members to advise their logistics service providers to apply for the subsidy in order to pass on the cost savings to businesses," he told the New Straits Times.

He said FMM during a meeting with the Finance Ministry to discuss the expansion of the scope of the targeted diesel subsidy on April 19, had requested that the list be expanded to include all types of vehicles, as long as they are carrying goods for commercial purposes, in order to be eligible for it.

Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said the government's decision to provide cash assistance to owners of private diesel vehicles affected by subsidy cuts reflected a proactive approach to mitigating policy impacts.

"However, it must be pointed out that the programme's success relies heavily on its execution. 

"To ensure fairness, transparent eligibility criteria need to be clearly drawn up and communicated to the public."

He said the application process must be streamlined and accessible to all, especially those with limited digital literacy. 

Robust verification mechanisms were crucial to prevent abuse and ensure the programme reached its intended beneficiaries, he said.

"Timely disbursement of cash assistance is essential to minimise cash flow issues.

"Continuous monitoring and evaluation are vital to assess the programme's effectiveness and make adjustments to optimise its impact." 

Syed Hussain said the scheme, which benefits public transport and good transport vehicles, might lead to the exclusion of numerous small businesses that relied on diesel vehicles for internal transportation within their supply chains. 

They include restaurants, retailers, construction companies, and manufacturers.

He said these micro-enterprises faced the burden of potentially higher transportation costs due to the lack of subsidies, impacting the entire supply chain with potential price increases. 

"Many MSMEs will suffer if no subsidy is given, and this will add to the cost of operations. 

"While subsidy rationalisation is necessary for fiscal sustainability and promoting efficient resource allocation, a well-coordinated approach can help mitigate potential adverse effects, such as its impacts on inflation, the economy, and people's welfare," he said. 

https://www.nst.com.my/news/nation/2024/05/1054390/industry-players-call-broader-scope-targeted-subsidised-diesel