PUTRAJAYA, June 9 — The market price of diesel will be set at RM3.35 per litre at midnight, June 10, in Peninsular Malaysia as a part of the government’s effort to end leakages in subsidised items, Second Finance Minister Datuk Seri Amir Hamzah Azizan announced today.

However, 30,000 private diesel-powered vehicle owners will receive RM200 Budi Madani cash aid tomorrow which would cover 80 per cent of users in this group.

"The amount of subsidised diesel increased sharply from 6.1 billion litres in 2019 to 10.8 billion litres in 2023 although the number of diesel powered vehicles did not increase significantly.

"This shows that the subsidy given was leaking, and could not be benefitted by the target group,” he told the press here.

He said by implementing targeted subsidies and plugging in leakages, the government is expected to save RM4 billion a year.

The minister also said that the high diesel prices in neighbouring countries have contributed to illegal consumption by foreigners and smuggling — around RM4 per litre in Thailand, and RM9 per litre in Singapore.

However, public transportation, school buses, local buses, express buses, ambulances, firefighters and hearses will enjoy the government's targeted subsidies under the Subsidised Diesel Control System (SKDS) 1.0

SKDS 2.0, however, will be targeted at logistics transportation, especially for matters that covered "daily needs."

"I want to emphasise, this aid has no deadline, therefore I urge to those who are indeed qualified, either for individual Budi or Agri-Commodity Budi to apply for this assistance. Reviews and appeals can also be done on the same website," he said.

On May 21, Prime Minister Datuk Seri Anwar Ibrahim announced that the Cabinet has approved the start of the diesel subsidy rationalisation programme, which is expected to save the government around RM4 billion a year.

He said that the initiative will initially target users in Peninsular Malaysia only and will not involve those in Sabah and Sarawak.

In April, Anwar said the government’s move to implement targeted subsidies is aimed at ensuring that the benefits are truly enjoyed by 80 to 85 per cent of the population. He said the move also aims to prevent the wealthy and the estimated 3.5 million foreigners in the country from benefiting from subsidies.