The existing diesel subsidy system will continue and will be improved by ensuring that vehicles that transport diesel supplies from gas stations or skid tanks are equipped with a "fleet card" system to monitor diesel consumption and avoid leakage, said Prime Minister Anwar Ibrahim.
Speaking in a press conference after chairing the National Economic Action Council (MTEN) in Putrajaya today, Anwar, who is also the finance minister, said the country's diesel subsidy system should be improved following the country's subsidy liability which jumped to RM13 billion last year.
According to him, a review showed that the use of diesel jumped 37.7% at 6.1 billion litres in 2019 to 8.4 billion litres in 2022, while the number of registered vehicles that use only diesel increased by 2.4% which is from 2.08 million in 2019 to 2.13 million in 2022.
"So there is a problem about misuse, smuggling and leakage. This is a leakage of RM10 billion.
"The subsidy on diesel will continue, but it must be through the fleet card. This way we can see who could use it, and don't take diesel to sell to factories as is happening now," he said.
He said the government is detailing the types of vehicles that will enjoy the diesel subsidy.
"We are detailing which vehicles need the subsidy and so on, but the diesel subsidy will not be raised.
"We just want to determine who is entitled to get subsidised diesel. We don't want taxpayers' money paid to help the people but used by cartels such as the cooking oil cartels, used for the benefit of a few," he said.
Anwar said the government has implemented a subsidy targeting programme in stages starting from January 2023 when the government will no longer provide full electricity tariff subsidies to large companies that use a large amount of electricity.
He said targeted and sustainable subsidy management is a priority in ensuring government spending is channelled to development needs that can provide higher added value to the national economy.
In the meantime, Anwar said MTEN agreed to develop a central database hub (PADU) which aims to combine as much socio-economic information as possible for each household to help the government formulate policies and target subsidies.
He said PADU will help the government to ensure that the subsidy programme implemented is more systematic to avoid any leakage among eligible household recipients.
"Frequency and accuracy of data are important to help formulate government policies that can meet the needs and confidence of the people.
"Issues regarding data security will also be addressed and prioritised, as well as better coordination to reduce aspects of duplication," he said and added that MTEN has been instructed to look into the need of drafting a specific act to enable data sharing initiative to be strengthened.