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Govt urged to give diesel subsidy tovan and tour bus operators

Publish date: Mon, 24 Jun 2024, 09:31 PM

PETALING JAYA: The Malaysian Tourism Federation (MTF) has urged the government to implement an immediate and substantial diesel subsidy mechanism for van and tour bus operators.

MTF president Datuk Tan Kok Liang said floating diesel prices have inflicted severe financial losses on tour operators and travel agencies already grappling with an extremely competitive business environment.

He said it is not just about passing the extra costs to tourists but also honouring contractual tour package arrangements and established obligations spanning the next six to nine months.

"Tourism business involves goodwill and relationships, and some of these key source destinations are particularly price-sensitive, especially the Indian, ASEAN, and Chinese markets," Tan said in a statement on Monday (June 24).

He called on the government to recognise that most tour operators were micro, small, and medium enterprises, adding that they were already fighting for survival in a fiercely competitive regional and global market.

Tan proposed an extension of the RM2.15 per litre rate in diesel subsidies for the sector up to March 31, 2025.

He also proposed a minimum quota allocation of 3,000 litres of diesel subsidies each month for each vehicle up to March 31, 2025.

"Remedial action is critical to provide tour operators the necessary time to adjust to the new pricing structure and alleviate the financial burden caused by rising diesel costs. Tour operators are the backbone of our tourism industry and vital to our economy.

"While we understand and support the objectives of the Madani government and the rationalisation of diesel subsidies, the industry requires immediate and decisive support from public stakeholders to navigate this crisis," Tan said.

Tan said each trip made by buses on pre-committed rates prior to the diesel subsidy rationalisation incurred losses, adding that it is unsustainable for tour operators.

"Each month, tour operators are losing approximately RM3,600 per bus based on the average consumption rate of 3,000 litres per month and the diesel price increase," he said.

Tan stated that there are about 10,000 tourism vehicles on the road without targeted assistance for the next six months, adding that tourism operators could lose more than RM100mil over the same period.

"The tourism ecosystem comprises multiple service providers and intermediaries. Ultimately, the final contractual party may have to bear the brunt of the increase," Tan said, urging the Finance, Transport, and Tourism, Arts and Culture Ministries to act swiftly and consider their proposals.

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