KUALA LUMPUR: The mechanism for targeted subsidies is still under consideration and is not expected to raise costs for current industries, the Dewan Rakyat was told today.
Deputy Finance Minister Lim Hui Ying said the government focuses on communicating effectively with the industries involved to avoid any sudden impacts on the economy.
"The implementation of targeted subsidies will be carried out in stages, subject to availability based on suitable models and feasibility, while maintaining the government's focus on ensuring that the cost of living for the people is not affected," she said in reply to a question from Vivian Wong (PH-Sandakan).
Wong asked about the method that the government will use in introducing a targeted subsidy scheme so that all government subsidies will not be misdirected just like the subsidised cooking oil.
"As announced during the tabling of the 2024 Budget, the government will prioritise diesel subsidies through methods and mechanisms announced by the Domestic Trade and Cost of Living Ministry on March 6.
"The expansion of subsidies under the Subsidised Diesel Control System Pilot Project 2.0 (SKDS 2.0) to nine types of commercial vehicles is now open for application starting from March 7.
"It is expected to benefit over 260,000 vehicles.
"Furthermore, from March 8 to 16, over 5,800 companies with more than 34,400 vehicles have successfully registered under SKDS 2.0.
"The government urges eligible vehicle owners to register under SKDS 2.0 to continue enjoying subsidies in the future."
Lim added the country's diesel subsidy expenditure last year reached RM14.3 billion, where the consumption amount increased by 10.8 billion litres, compared to 6.1 billion litres per year in 2019 (before the Covid-19 pandemic).
"The increase in usage of as much as 70 per cent was not in line with the increase in the numbers of diesel vehicles, which recorded an increase of less than three per cent.
"This further supports the claims of huge diesel subsidy leakage."
She said presently, all diesel vehicles under the public transport category under the SKDS 2.0, including vans and school buses, are enjoying subsidised diesel prices at a rate of RM1.88 per litre.
"Meanwhile fishermen receive diesel subsidies at RM1.65 per litre," she said, adding that both categories will continue to enjoy the diesel prices and will not be involved in the targeted diesel subsidy programme.
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