Blanket diesel subsidy gives rise to leakages, smuggling, says Ahmad Zahid

The Star

The granting of blanket diesel subsidy gives room for unscrupulous parties to misappropriate or smuggle this commodity in the black market, said Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi.  Ahmad Zahid, who is also the Rural and Regional Development Minister, said this in his speech at the opening of the Symposium on Cost of Living 2023 on Tuesday (Nov 28), which was delivered by Acting Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali, that as such, it was not appropriate for the government to continue with the current method of granting subsidies as it was unfair to the target group comprising people who really need assistance.  Read more at https://tinyurl.com/443bt394  WATCH MORE: https://thestartv.com/c/news SUBSCRIBE: https://cutt.ly/TheStar LIKE: https://fb.com/TheStarOnline

Transcript

00:00 [Alhamdulillahil quwwail kuntum hayra umatin uhrijatil nas]

00:05 We must admit that the government's subsidy has helped to stabilize the price,

00:13 guarantee supplies and indirectly help the people in reducing the burden of living costs.

00:20 However, the surplus of benefits from the subsidies in full since so long

00:27 has been enjoyed by the high-income groups and not the citizens.

00:34 From the report of the Impact Study, Petrol and Diesel Subsidy Program,

00:43 the chosen transportation sector got a total of Rp399.90 per month

00:48 while the B40 group used only Rp243 per month.

01:09 This means that the T20 group is more likely to benefit from the B40 subsidy.

01:19 This figure proves that the subsidy system is not achieving its basic objective

01:26 because the target group that should be helped does not get the optimum benefit.

01:34 At the same time, the fuel subsidy initiative has been started since 2001.

01:41 Diesel subsidies that should be beneficial to fishermen or users to get value for money

01:48 for the services and goods they buy have been misused by certain parties who take the opportunity.

01:58 We know that because of the diesel subsidies in full, there is a gap

02:04 that has caused those who are irresponsible to beg and drink diesel in the dark market.

02:12 Therefore, it is not reasonable for the government to continue an approach that is indeed

02:20 unfair to the target group, namely the group that really needs help and gets the optimum benefit.

02:29 The government also bears the greater cost of subsidies.

02:35 In 2022, for example, the total subsidy value that has been spent is Rp91.9 billion.

02:49 One value that is too big if compared to previous years.

02:56 For 2023, the original requirement for the subsidy requirement is Rp64 billion.

03:07 However, the government suggests that this value exceeds Rp81 billion based on the current spending.

03:18 A continuous scenario like this is not optimal from a fiscal point of view and is reasonable

03:25 for a responsible government to take action to improve the delivery of more targeted aid to the people.

03:37 Thank you for your attention.

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