KUALA LUMPUR: The government implemented targeted diesel subsidies to prevent leaks and ensure that subsidies reach those in need, said Christina Tee, president of the Malaysian International Chamber of Commerce and Industry (MICCI).

She believes this strategy could significantly reduce illegal activities such as smuggling.

Tee noted that the increase in diesel consumption, which surpasses the number of diesel vehicles, indicates the presence of leaks that must be addressed.

"I think the government wants to impose controls. In other words, I think they want to tighten controls at this time, and they must have ways to return the subsidies to the actual B40. 

"This is very important because, frankly, how many B40s in Malaysia use diesel? Not many. Diesel is actually more widely used by logistics players," she told Business Times.

Finance Minister II Datuk Seri Amir Hamzah Azizan announced that the retail price of diesel at all pumps in Peninsular Malaysia would be set at RM3.35 per litre, set at the market price based on the Automatic Pricing Mechanism formula, effective 12.01 a.m. on June 10.

He had said that the targeted diesel pricing and subsidy implementation would save the country RM4 billion annually, while strengthening its financial position in the long term.

Separately, Tee said MICCI, known for advocating policies that support economic recovery and growth, voiced support for the government's initiative. 

She highlighted MICCI's role in representing the business community's interests and collaborating closely with government agencies to shape executable policies.

"MICCI is very well known for our loudness in supporting and recommending certain ideas that will help the government agencies work on executable policies. 

"Some efforts led to introducing measures that support economic recovery and growth, such as tax incentives and financial aid packages for mid-tiers. 

"We are close to government agencies, and this amplifies MICCI's advocacy agenda," she added.

https://www.nst.com.my/business/corporate/2024/06/1064906/micci-believes-targeted-diesel-subsidy-will-reduce-smuggling