A former adviser to Najib Razak has questioned Rafizi Ramli's arguments justifying the removal of blanket diesel subsidies, saying closer inspection shows that the economy minister's claims do not add up and, in some cases, defy logic.

Isham Jalil, a former Umno information chief who was sacked by the party last year, also said it was not true that crude oil prices were at an all-time low in 2008, around the time that Rafizi and PKR launched a campaign to lower fuel prices in response to the then Barisan Nasional government's plans abolish fuel subsidies.

Isham, who was part of the Economic Planning Unit under Najib in charge of the fuel rationalisation plan, said crude oil prices had been among the highest that year.

"This means that the government's liability for subsidies in 2008 was higher, unlike today," Isham said in a podcast programme with TV Pertiwi, shorter clips of which have gone viral on social media as Malaysians question the government's arguments for removing subsidies for diesel.

Isham was commenting on Rafizi's response to someone who had confronted the PKR leader during a recent speech in Penang.

An audience member asked Rafizi why the Pakatan Harapan government had not honoured its election promise to lower fuel prices.

A visibly annoyed Rafizi said that in the past, the government had needed to spend very little on fuel subsidies, giving a figure of RM3 billion out of a RM200 billion budget, so that the price of petrol could be brought down to RM1.90 per litre.

Rafizi said his previous campaign in the opposition bloc for the retention of fuel subsidies was driven by the fact that the government could still afford them then. He said in contrast, they now cost the present government RM80 billion a year.

Isham, however, said the current crude oil price of US$125 per barrel was higher than the US$80 in 2008.

On June 10, diesel prices in Peninsular Malaysia rose to RM3.35 per litre after months of speculation that the subsidies would be removed.

Prime Minister Anwar Ibrahim repeatedly said that the subsidies were undermining the economy and not benefiting Malaysia. He also claimed that leakage occurred in the form of subsidies flowing into neighbouring countries through smuggling, and that the subsidised prices were used by foreigners who did not pay taxes.

Figures don't add up

Isham said the allegations about smuggling and foreigners did not add up.

He cited Putrajaya's claim that up to RM8 billion, or about half of the annual diesel subsidies, was lost to smuggling activities by land or sea.

He said this would translate to 600 million litres of diesel being smuggled every month.

"600 million litres divided by 30 days equals 20 million litres of diesel smuggled across borders every day.

"If that's true, there would have to be 40,000 tankers lining up to cross the border every day, each carrying 500 litres of diesel," Isham said.

He said that even with twice this capacity, it would still involve 20,000 such tankers.

Isham said it could be assumed that each tanker could transport 20,000 litres.

"That means a thousand tankers are queuing to cross the border every day! That means one tanker is released every minute. Does that make sense?

"Where did he (Rafizi) get these numbers?" asked Isham, adding that this would mean that the police, customs and immigration were turning a blind eye.

'Rafizi, do you know what you're talking about?'

Isham also took Rafizi to task over his claim that diesel smuggling was taking place at sea, saying the minister was pointing his guns at fishermen and accusing them of illegally selling subsidised diesel to foreign vessels.

"Rafizi, do you know what you are talking about?" he asked again, referring to the minister's claim that fishing boats were being used to smuggle the fuel.

"For half of the smuggled diesel, or 10 million litres, how many thousands of fishing boats are needed to go out to sea? Rafizi, are you saying that APMM and the navy don't see this?" Isham added, referring to the Malaysian Maritime Enforcement Agency.

He said Rafizi must have realised that his figures did not make sense and then claimed that the smuggling and leakage were taking place within the country in the form of people buying subsidised diesel at the pumps and selling it to the industry.

Based on the government's claim that RM7 billion to RM8 billion was lost in subsidies, he said this meant that 70% to 80% of diesel was purchased by consumers who sold it illegally to the industry.

"So of the 4,000 or so petrol stations nationwide, seven out of 10 are involved in theft!"

He added that even then, the action could not be termed "smuggling" as it happened within the country.

"Smuggling is a cross-border activity."

Isham also criticised Rafizi's argument that subsidised diesel was sold illegally to the industry.

He said industries used a cheaper variant of diesel.

"But the point is this: one can tell the difference between industrial and automotive diesel. In some cases, Petronas or the government has dyed the colour so that they know that someone is selling a certain type (of diesel) and whether it comes from the pump or is a different colour.

"It's not easy for people to steal like that," Isham said, adding that Rafizi had probably made up the claim about illegal diesel sales because his figures on smuggling didn't make sense.

In another clip making the rounds, Isham questioned Anwar's claim that diesel subsidies benefitted foreigners and the rich.

"My question is, who are these foreigners who use diesel cars and motorbikes? Most foreigners don't even have a driving licence. They don't drive cars or motorbikes, and even if they do, they do it illegally.

"The point is that there aren't many of them. As for the rich, how many of them drive luxury cars with diesel engines? Most luxury cars like Porsche, BMW and Mercedes run on petrol, not diesel."

https://www.malaysianow.com/news/2024/06/18/clips-of-ex-umno-man-debunking-rafizis-claims-go-viral-as-anger-grows-over-diesel-price