The government's recent announcement regarding the simultaneous implementation of targeted diesel subsidies and a diesel price float has unleashed widespread concern and dissatisfaction. The sharp increase in diesel retail prices, rising from RM2.15 per litre to RM3.35 per litre, representing a staggering 55.8% surge, imposes immense financial pressure on both the public and businesses. 

The current RM200 monthly diesel subsidy provided under the Budi MADINI Subsidy Assistance Programme falls short of meeting the daily operational needs of farmers and plantation smallholders. Diesel is essential not only for agricultural and commodity machinery but also for generators and irrigation systems.

The lack of transparency regarding the specific details of the Subsidy Diesel Control System (SKDS) has escalated uncertainty among businesses regarding transportation costs, potentially leading to cost transfers to consumers, thereby exacerbating the daily cost of living.

Wanita MCA urges the government to heed the reasonable appeals from all sectors and make necessary adjustments to the Diesel Subsidy Assistance Programme. Increasing subsidy amounts and expanding the scope of subsidies more evenly would effectively support those in need and relevant sectors. Additionally, the government should implement the free-floating diesel price mechanism gradually to mitigate its impact on the public and the economy.

Furthermore, Wanita MCA calls on the government to enhance policy transparency by precisely revealing the details of the SKDS and formulating a phased implementation plan. The introduction of multiple taxation policies within a short period has exacerbated economic burdens on the public and various sectors, leading to reduced purchasing power and a potential slowdown in market and economic growth.

Tackling diesel smuggling and strengthening enforcement measures is crucial. Improving regulation and imposing stricter penalties on smuggling activities can ensure subsidies reach intended beneficiaries and reduce market distortions. Additionally, the government should provide special assistance to diesel-dependent industries such as agriculture, fisheries, and smallholders to alleviate the impact of price spikes.

In the long term, the government should invest in renewable energy to reduce dependence on fossil fuels. Incentives for adopting solar, wind, and other renewable energy technologies can provide sustainable and stable energy solutions. Extensive consultations with stakeholders should inform balanced and effective subsidy rationalisation plans.

Wanita MCA urges the government to proceed with caution, conduct thorough economic impact assessments, and listen to opinions from all sectors to ensure policies are aligned with public sentiment and promote stable and sustainable economic development.

Wong You Fong
Wanita MCA National Chairperson

12 June 2024

-MCA Comm-