KOTA BARU: The government plans to introduce a new mechanism for the sale of petrol and diesel under its subsidy rationalisation programme from next year.
Domestic Trade, Co-operatives and Consumerism Ministry secretary-general Datuk Seri Alias Ahmad said the new mechanism for diesel subsidy was expected to be introduced by early next year and the new mechanism for petrol a few months later.
He said both mechanisms were being finalised and details could not be revealed as they had not been decided by the Finance Ministry and the Economic Planning Unit of the Prime Minister’s Department.
“There will be separate systems for petrol and diesel.
“The introduction of the new mechanism for diesel alone will help the government save between RM5 billion and RM6 billion annually,” he told a press conference after chairing a departmental joint council meeting here yesterday.
Last year, the government spent RM9.92 billion on diesel subsidy alone. The amount was more than double the RM4.03 billion it spent in 2010. At the same time, the government lost 3.5 billion litres in subsidised diesel to smugglers.
Alias said the introduction of the new mechanisms would involve about 780,000 diesel-powered vehicles and 18 million vehicles running on petrol in the country.
He said after the rationalisation exercise, fuel would be sold at the pumps based on the market price except to those who were qualified to enjoy the subsidies.
Alias said the mechanism for petrol would come much later as it involved a bigger number of vehicles and a more expansive system.
“We are lucky that we already have a subsidy system for diesel now and all that is needed is an upgrade. The new system for diesel has already gone through several tests, including user acceptance and final assembly tests.
“However, it will be a little later for petrol as it has to start from zero.”