In less than one month, the government’s move to rationalise diesel subsidy is starting to show results, especially in curbing smuggling. The proof of this is in the average daily sales of diesel in Peninsular Malaysia, which is down by over 30%, finance minister II Datuk Seri Amir Hamzah Azizan told parliament.

The senator also said that there are petrol stations in border areas that have seen reduction in diesel sales by 40 to 50%, Bernama reported yesterday.

Amir Hamzah has said this before in the Dewan Rakyat, explaining on June 24 that sales of diesel were down by eight million litres a day compared with the previous week, while commercial sales of diesel (purchased by companies at the unsubsidised market rate) increased by four million litres.”The upward trend in commercial diesel sales is also positive as it indicates a reduction in subsidised diesel leakages,” he said.

The minister said that an oil company had informed the authorities that sales of diesel at petrol stations near national borders have dropped by 40%. “This information was obtained from an oil company, which has provided additional evidence of diesel smuggling into neighbouring countries,” he added.

The national news agency also added that although the administration of prime minister Datuk Seri Anwar Ibrahim received criticism over the brave move to rationalise diesel subsidy, the positive effects can be seen clearly even at this early stage. In his Budget 2024 speech, Anwar, who is also finance minister, said that Malaysia loses RM10 billion to diesel smuggling.

It is said that the diesel subsidy rationalisation plan will save the government around RM4 billion a year. In 2023, the country spent RM14.5 billion on subsidising diesel.

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