What subsidy mechanism is being reviewed to curb diesel leakage?

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Review of Fuel Subsidy Mechanism Underway to Curb Diesel Leakage

The Malaysian government is currently reviewing its fuel subsidy targeting mechanism to address issues of leakage and misappropriation, with a focus on improving efficiency and ensuring subsidies are better directed towards eligible recipients. This review includes exploring a shift from direct cash assistance to a more structured system, drawing parallels with the existing BUDI95 programme.
Shift Towards a Structured System

The government is considering proposals to transition away from direct cash assistance schemes. This move aims to implement a more organised and structured approach to subsidy distribution, similar to the framework already in place for the BUDI95 programme.
Enhancing Efficiency and Targeting

The primary objective of this review is to enhance the overall efficiency of the subsidy system. By refining the targeting mechanism, the government seeks to ensure that subsidies are more effectively channelled to those who genuinely qualify for them, such as commercial vehicle users.
Alignment with BUDI95 Implementation

The proposed structured system is intended to mirror the implementation of BUDI95, aiming for a simpler, more effective, and better-targeted approach to subsidy allocation. This ensures consistency and leverages the perceived success of existing programmes.
Special Consideration for Specific Sectors

Discussions are also ongoing regarding tailored subsidy mechanisms for specific sectors, such as the fisheries industry. The Ministry of Agriculture and Food Security is actively studying a dedicated mechanism for fishermen, in consultation with relevant bodies like the Fisheries Development Authority of Malaysia (LKIM).

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What subsidy mechanism is being reviewed to curb diesel leakage?

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