Kota Kinabalu: Finance Minister II Senator Datuk Seri Amir Hamzah said it is too early to say how much has been saved from plugging diesel subsidy leakages under Budi Diesel, though early dealer feedback shows a drop in sales volume.
“The drop in volume probably indicates that the people who used to take it but were not eligible are no longer using the opportunities given,” he said.
Before the introduction of targeted subsidy reforms, the government was estimated to be losing about 6.5 million litres of subsidised diesel daily to smuggling syndicates and industrial misuse, amounting to losses of up to one billion litres a year.
A Finance Ministry statement on Sunday, showed that more than 336,000 diesel transactions had been recorded from Budi Diesel’s early access phase on June 27 to July 4, involving the purchase of 12.6 million litres of subsidised diesel.
The government has borne more than RM23 million in subsidies over that period, covering purchases made at RM2.15 a litre during early access and RM2.10 a litre since full implementation on July 1.
Amir Hamzah is confident that meaningful savings would materialise, pointing to the earlier rollout of the Subsidised Controlled Diesel System in Peninsular Malaysia and the Budi 95 programme, both of which he said generated significant savings for the government.
“I am confident as what we saw when we did the system first time in Semenanjung, the savings that the government did was significant. I am also comfortable that when we did Budi 95, we also saw the same thing,” he said.
He said those earlier savings were channelled back to the public through price reductions, including the drop in Budi Diesel price from RM2.15 to RM2.10 and an earlier cut in the Budi 95 price from RM2.05 to RM1.99.
“The better that we have savings, the more we plug the hole, the more that government has the capacity to really help the rakyat in a different form,” he said, adding that leakages to ineligible users meant the government was effectively paying for a benefit intended for others.
The reformed Budi Diesel system uses MyKad verification to confirm citizenship and eligibility, ensuring the subsidy reaches qualified Malaysians while non-citizens and ineligible parties are required to pay the unsubsidised price.
“Targeted subsidies are a benefit for eligible Malaysians. At the same time, subsidy targeting is important to ensure the supply of subsidised diesel remains secure and that assistance is not misused by ineligible parties,” he said, adding that the mechanism was meant to ensure subsidies reached those in genuine need while closing loopholes that had previously cost the country billions of ringgits annually.
Present was Shell Malaysia Trading Sdn Bhd and Shell Timur Sdn Bhd Managing Director Shairan Huzani Husain as well as Sabah KPDN Director Shahril Nizam Shahidin, among others.
