Following the announcement by Finance Minister II Datuk Seri Amir Hamzah to increase the retail price of diesel by RM3.35 per litre effective today, the Ministry of Finance (MOF) has released an infographic of the list of diesel prices in the Southeast Asian market involving several neighbouring countries including Indonesia, Thailand and Singapore.
According to the accompanying infographic, Malaysia still has the lowest diesel retail price among other Southeast Asian countries except Brunei. Showing that diesel prices reached RM8.79 per litre in Singapore, Myanmar (RM5.40), Philippines (RM4.75), Cambodia (RM4.64), Laos (RM4.56), Indonesia (RM4.43) and Thailand (RM4.24) and Vietnam (RM3.69).
As mentioned above, Brunei is the only country that sets the retail price of diesel at the lowest price, at RM1.09 per litre, which is not surprising considering it is the third largest oil producing country in Southeast Asia.
With the new price announced, it means that the price increase for Euro 5 B10 and B20 diesel in Peninsular Malaysia is now more than RM1.20 (or 56%), compared to the previous price of RM2.15 maintained since February 2021. However, the media release issued by the MOF did not mention the price of Euro 5 B7 diesel which was previously more than 20 sen per litre, and if calculated according to the adjusted price, it means that it is now RM3.55 per litre.
However, the retail price of diesel in Sabah and Sarawak remains at RM2.15 per litre. According to Amir, the new retail price of the fuel is based on the Automatic Pricing Mechanism (APM) formula for the month of May.
In addition, as part of the implementation of this targeted diesel subsidy, the government has also fixed the price of diesel at RM2.15 per litre for sectors eligible for the Subsidized Diesel Control System (SKDS) 2.0, which provides fleet cards for eligible logistics vehicles. The aim is to curb the price increase of consumer goods.
Meanwhile, the retail price of diesel under the Subsidized Diesel Control System (SKDS) 1.0, which applies to public transport vehicles such as school buses, express buses, ambulances and fire engines, remains at RM1.88 per litre. Similarly, the diesel subsidy for fishermen remains at RM1.65 per litre.
“The government’s purpose in implementing this targeted subsidy is to stop the phasing out of diesel subsidies which are becoming increasingly common and causing billions of ringgit in losses to the country. The government spent RM14.3 billion on diesel subsidies last year and the country cannot afford to continue losing billions of ringgit due to widespread diesel smuggling and embezzlement when the money would be better spent on improving people’s quality of life and developing the country,” said Amir.
According to him, a total of 30,000 owners of private diesel vehicles in the B40 category will receive RM200 deposited into their respective accounts through the Budi Madani scheme starting today.
While Prime Minister Datuk Seri Anwar Ibrahim insisted that the government’s move to target subsidies is to save the country, he said he was aware that the move would be “pushed through” but it had to be implemented because there was no other option, Berita Harian reported.
“We had to take some unpopular measures to save the country. Who wants this subsidy targeting? I know that no matter what we do, we will face all kinds of slander and deception from those who wear songkok, turbans and robes but continue to lie, even though we told them that all the prime ministers before we had agreed on the targeting of subsidies, there is no political will to implement it because the risk is there, but to save the country, we have no other choice,” he said.
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