Subsidy Removal - Diesel Truck Sales To Drop, Cash Transfer For Targeted Subsidy!

The potential effects of diesel subsidy rationalisation on the sales of pickup trucks in Malaysia have drawn the attention of the Federation of Motor and Credit Companies Association of Malaysia (FMCCAM). Using pickup trucks for business purposes may result in higher expenses for consumers and businesses, which could have a negative impact on their bottom lines, according to FMCCAM President Datuk Tony Khor.

He urged the government to be clear about which organisations would obtain the targeted subsidies and how they would be put into place. Khor further stressed that the relevance of this issue is highlighted by the popularity of pickup trucks in Malaysia, with Toyota alone selling almost 20,000 units. Numerous pick-up trucks are registered for private usage and are therefore excluded from the two categories that are eligible for subsidies, namely public transportation and logistics.

The government announced last week that it would gradually eliminate fuel subsidies during the unveiling of the 2024 Budget. To prevent subsidy leakage, this would entail charging higher costs to some customers while offering subsidised prices to others, such as logistics firms.

Diesel vehicle owners have also voiced their reservations regarding the rationalisation of subsidies. Some people believe they will have to switch to gasoline-powered automobiles if diesel is no longer supported. Timothy Anthony, an events specialist who frequently travels in his four-wheel drive, noted that the increased cost of fuel will raise his cost of living and urged that the government concentrate on strengthening enforcement to combat diesel smuggling.

Timothy Anthony emphasised the need for pickup trucks in a number of small enterprises, such as mechanics, fruit vendors, and landscapers. He contended that gas SUVs might not be a suitable replacement because they are primarily made for carrying passengers rather than cargo.

He added that the government should implement programmes to ease the switch to gasoline-powered automobiles by assisting people in paying off their Hire Purchase debts on diesel cars as a potential option.

Prime Minister Anwar Ibrahim stated in the Dewan Rakyat that the government is thinking on transferring subsidies to the through cash transfers in order to stop leakage, according to BERNAMA. However, it was also noted that only certain subsidies should be covered by the cash transfer. Although no concrete mechanism has yet been decided upon, more information on this subject will be announced at a later time. 

Source: NewStraitsTimes & Bernama