THE government may have rushed into ending the blanket diesel subsidies effective yesterday without considering the full impact on the people, said P Ramasamy today.

The Urimai president said the government had failed to take all necessary measures to cushion the B40 category from the worst effects arising from the rise in the cost of living following the removal of diesel subsidies.

“I have the feeling that the targeted diesel subsidies were introduced without much thought or understanding.

“If the government seriously wants to save money, then it should think of parallel measures such as the trimming of the bloated civil service, shutting down agencies that serve no purpose, curbing the brain drain by coming up with the idea of meritocracy that has been long avoided by the government and others.

“Saving money for the country through the imposition of targeted diesel subsidies leaves much to be desired for,” the former Penang deputy chief minister said in a statement.

Ramasamy added that a broader, comprehensive and systematic framework is needed to address the financial dilemma faced by the government.

“Short-term measures stand the chance of being fizzled out without meeting the intended objectives,” he said.

He said this after the government allowed diesel to be sold at market prices beginning June 10. Putrajaya said this would improve the country’s finances.

However, a targeted subsidy is still given under the Budi Madani scheme where private diesel vehicle owners, small-scale farmers and commodity growers will receive RM200 monthly in cash assistance. 

Under the diesel subsidy rationalisation, which is only in effect in Peninsular Malaysia, the new unsubsidised diesel price is RM3.55 per litre, an increase of 55% from RM2.15 previously.

Following the removal of the diesel subsidies, many have expressed fears on social media that prices of essential items will increase in tandem with the rise of transportation costs.

Several businesses have also reportedly informed their customers that they would be forced to increase their prices.

On social media, such announcements by a towing service operator, a hardware store and a concrete supplier, among others, had gone viral.

These businesses said that their transportation costs would rise with the subsidy removal.

Yesterday, MCA urged the government to temporarily suspend the diesel price float to allow Malaysians sufficient time to familiarise themselves with and enrol for the Budi Madani diesel subsidy assistance programme.

Its vice-president Wee Jeck Seng said the suspension will also allow the government to re-evaluate any deficiencies within the Budi Madani initiative.

He said that the monthly RM200 Budi Madani diesel subsidy assistance is not only insignificant but also negligible compared to the current diesel price hike. 

People applying for this RM200 subsidy must meet various stringent conditions, and the scheme has also overlooked certain crucial areas, added the Tanjung Piai MP.

He added that if the government insisted on implementing the diesel price float, the government must then consider adopting a gradual subsidy reduction in phases. 

Ramasamy agreed that the targeted diesel subsidies should be introduced in a gradual manner, giving the time and space for the government to see their effects.

“The all-of-sudden introduction of targeted diesel subsidies might pose problems in the long run, problems that the government might not have anticipated,” he said. – June 11, 2024.