Drivers fume as Malaysia axes diesel subsidies, sending prices soaring

The price of diesel increased more than 50 per cent overnight in Peninsular Malaysia following the government’s lifting of a blanket subsidy

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A man fills his car with fuel in Kuala Lumpur. Malaysian Prime Minister Anwar Ibrahim has said the diesel subsidy cut was aimed at the “uber rich and foreigners”. Photo: AFP

Published: 1:30pm, 10 Jun 2024Updated: 2:01pm, 10 Jun 2024

Malaysian drivers fumed on Monday after diesel prices shot up more than 50 per cent overnight as the government slashed subsidies, leaving some families looking to downsize and ditch their old gas guzzlers for something more economical.

Across most of Malaysia, the price of diesel went up from 2.15 to 3.35 ringgit (46 to 71 US cents) per litre following the lifting of a blanket subsidy, which cost the government an estimated 4 billion ringgit (US$852 million) per year and encouraged rampant fuel smuggling into neighbouring Thailand.

The states of Sabah and Sarawak in East Malaysia were exempted from the move.

Malaysian civil servant Hanif Abdul Razak told This Week in Asia he was looking to part with his seven-seater SUV as he could no longer justify the running costs.

“I’m not ‘uber rich’,” he said. “It’s a sensible purchase considering comfort and safety for my family of six.”

Announcing the subsidy cut on May 22, Prime Minister Anwar Ibrahim said it targeted the “uber rich and foreigners” who he claimed were unjustly benefiting from diesel subsidised by Malaysian taxpayers.

Malaysian ringgit banknotes. The government has offered a 200-ringgit monthly handout to some Malaysian to cushion the impact of the subsidy cut. Photo: Bloomberg