Headline :Proposal on ways to ease burden of fuel subsidies

NEW SUNDAY TIMES
Date :14/11/2004
Page:02
Byline :By R.S. Kamini; Sim Bak Heng
Type : News

KUALA LUMPUR, Sat. - A proposal will be submitted to the Cabinet on ways to ease the burden of fuel subsidies without resorting to a price hike.
Domestic Trade and Consumer Affairs Minister Shafie Apdal said: "The proposal shows how the Government can economise on the fuel subsidies." The plan will be put to the Cabinet on Nov 24.
The Government estimated that with oil prices at US$53 (RM201.40) a barrel, annual fuel subsidies would set it back by RM13.9 billion.
"Millions of ringgit could be saved and channelled to government projects like building schools or hospitals," he said.
The proposal, he added, would also call on the Government and the public to monitor fuel subsidy exploitation.
"The subsidy is meant for lower income earners but certain parties are using it for their own profit like selling subsidised fuel to neighbouring countries or industrial sectors," said Shafie.
He was speaking after launching Pre-Raya Sales Programme at Taman Melawati Market today.
In Johor Baru, some petrol station operators and industrial dealers are shortchanging the Government by manipulating the sale of diesel intended for general consumers.
As diesel costs less at the pump due to government subsidies, unscrupulous station operators are selling some of their stock to industrial dealers for a profit.
(Industrial dealers are those appointed by oil companies to sell diesel to industrial users.)
Diesel retails at 83 sen per litre at petrol stations, while industrial users like factories pay RM1.50 per litre. The price difference has led to the scam.
An industrial source said petrol stations were known to sell the fuel to dealers at 95 sen per litre. The latter then sell the diesel to their customers at RM1.20 per litre, which is below the standard price.
The illegal trading, he said, benefited these parties. Petrol station operators make an extra 12 sen per litre and industrial users save 30 sen per litre, while dealers earn 25 sen for every litre sold.
The losers are the general consumers and the Government, which allocates huge fuel subsidies every year.
The source said the illegal trade between petrol station operators and dealers was rampant.
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