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Fahmi: RM3.5bil lost under old subsidy system

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Publish date: Sat, 15 Jun 2024, 08:51 AM

JOHOR BARU: Some RM3.5bil was lost last year due to subsidised diesel that was smuggled or misappropriated, says government spokesman Fahmi Fadzil.

Fahmi, who is Communications Minister, said that the implementation of targeted subsidy had significantly reduced the smuggling of subsidised diesel.

“Last year, we lost over two billion litres of subsidised diesel to misappropriation and smuggling activities, worth between RM3bil and RM3.5bil,” he said.

Fahmi added that the construction industry was among the sectors that were believed to have been involved in the missing fuel which totalled two billion litres.

“There are certain sectors, such as the construction sector, that have never been entitled to the diesel subsidy but are claiming they now need to increase the prices of their goods and services following the diesel subsidy rationalisation.

“That should not be the case as they should not have received the subsidy to begin with. If they were using subsidised diesel in the past, then it is considered misappropriation,” he said.

Retail diesel prices have gone up to RM3.35 per litre after the government switched from blanket fuel subsidies to a targeted system meant for certain industries.

As a result, a variety of businesses ranging from those involved in construction to tourism have warned that they will be forced to raise prices to absorb the increased cost of fuel.

Fahmi also issued a stern warning to businesses not to use the new subsidy system as a justification to jack up the prices of their goods and services at will.

“Several companies have been summoned to the Domestic Trade and Cost of Living Ministry (KPDN) to explain why they need to hike the price of their goods when they were never entitled to the subsidy in the past.

“It is an offence for them to increase prices without justification, and KPDN is monitoring the matter very closely,” he said.

 

https://www.thestar.com.my/news/nation/2024/06/15/fahmi-rm35bil-lost-under-old-subsidy-system

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