Diesel Fleet Card Subsidies To Mitigate Price Increases And Enforced: Minister   – BusinessToday

Diesel Fleet Card Subsidies To Mitigate Price Increases And Enforced: Minister   – BusinessToday

The implementation mechanism of the targeted oil subsidy policy under the Subsidised Diesel Control System (SKDS) uses a mechanism for diesel subsidy distribution which began in 2013 through SKDS 1.0 by developing the MySubsidi Diesel System using fleet cards for 10 types of public transportation at a subsidised rate of RM1.88 per litre, Minister of Domestic Trade and Costs of Living Datuk Armizan Mohd Ali said in the Dewan Rakyat today.

He told the August House that in the Budget 2024 presentation on October 13, 2023, the Government proposed the implementation of a targeted restructuring approach for diesel fuel subsidies to ensure that Government subsidies reach the intended groups and to address leakages.

“One of the decided methods is to expand the SKDS mechanism to continue subsidising the freight transport sector at the existing price of RM2.15 per litre as an alternative to bulk subsidy methods at petrol stations,” he said.

“The initial plan was to expand the SKDS mechanism to only 9 types of freight transport. However, after thorough deliberation through various workshops and engagement sessions across ministries and agencies, including stakeholders such as industries and user groups, the Government decided to expand the SKDS mechanism and subsidy distribution to an additional 14 types of freight transport.

“This brings the total number of public and freight transport types receiving subsidies at RM2.15 per Litre to 33,” he said when replying to a question raised by Dato’ Seri Hamzah Zainudin [Larut] who requested the Minister to state: (a) the implementation mechanism of the targeted oil subsidy policy under the Subsidised Diesel Control System (SKDS) to enable the public, small traders, and vendors to benefit from targeted subsidies; and (b) the Government’s assurance that this targeted oil subsidy will not adversely affect the overall economic chain, which could further escalate prices of goods thereby impacting the majority of the population, especially the M40 and B40 groups today.

Armizan explained, with expansion of the mechanism, the use of SKDS through fleet cards under the supervision of KPDN includes: (i) public transportation sector with 10 types including school buses, express buses, stop buses, taxis, hearses, ambulances, and fire engines; (ii) freight transportation sector with 23 types including prime movers, various cargo trucks, agricultural products, water, flour, animal pens, mobile service and waste vehicles, mobile service buses or vans, and food catering trucks, buses, and vans.

“This increase is made to ensure that all types of transport directly related to the supply chain of essential consumer goods and services for daily consumption continue to benefit from subsidies. This aims to address the impact of targeted diesel subsidy implementation on the population, especially the B40 and M40 groups mentioned by YB Larut.”

Armizan added besides continuing targeted subsidy distribution to relevant public and land transport sectors, measures to mitigate price increases of goods and services are also implemented through strict enforcement mechanisms.

Among the approaches used are pre-implementation price data collection for subsidy targeting, comprehensive enforcement of the Price Control and Anti-Profiteering Act (AKHAP) 2011 through OPS KESAN 2.0, enhancing the omnipresence of enforcement teams in the field, advocating consumer usage and compliance, and legal advocacy among traders, he said.

The Government will closely monitor the implementation of this targeted diesel subsidy and remain open to suggestions and feedback from all parties to collectively restrain any price increases in goods and services, particularly actions against profiteering contrary to regulations and laws, the minister added.

Related Articles