Targeted Diesel Subsidy Saves Government RM600mil Monthly - Anwar

Prime Minister Anwar Ibrahim reported that the government's targeted diesel subsidy program has effectively curbed the misuse of subsidized diesel since its implementation in June 2024.

The program has generated substantial cost savings for the government, approximately RM600 million per month, by specifically targeting eligible recipients and sectors, thereby reducing previous leakage due to smuggling and unauthorized business use.

The Prime Minister revealed this figure in response to a parliamentary question from Cha Kee Chin (PH-Rasah), who inquired about the total savings from SKDS 2.0 and how these funds were being used to benefit the public from its implementation on June 10th until December 31st.

The success of the initiative was evident in the significant 25% decrease in diesel sales at petrol stations, equivalent to a reduction of approximately seven million gallons per day, as highlighted by the Prime Minister.

“Sales of commercial diesel have increased by almost 50%, or by four million litres per day, indicating the substantial amount of subsidised diesel that was previously being purchased by the industrial sector from petrol stations before the controlled floating of retail diesel prices,” he said.
Anwar stated that the savings enabled the government to allocate funds for various development projects, including improvements to public infrastructure, healthcare, and education.

Additionally, these savings allowed for increased allocation for social support programs. For example, the allocation for STR and Sara was increased from RM10 billion to RM13 billion the previous year.
Datuk Armizan Mohd Ali, Minister of Domestic Trade and Cost of Living, recently announced in a written parliamentary reply the government has allocated RM20 billion for consumer goods subsidies, including fuel, and RM300 million for the Payung Rahmah initiative.

An additional RM700 million will be used for price controls and RM250 million to address supply chain disruptions in rural areas particularly in Sarawak and Sabah.