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Diesel Crunch in Malaysia


Malaysia Star. Malaysian government policy, rising fuel prices and the black market have combined to create a severe shortage of diesel in the country. Public transport and the cargo industry in Malaysia are sputtering to a halt, with up to 30% of trucks already “not moving.”

Twenty-one percent (547) of the country’s 2,641 fueling stations ran out of diesel on Tuesday.

The shortage is due to hoarding and smuggling enabled by Malaysia’s dual price policy for diesel (which is subsidized). Businesses pay 1.70 ringgit ($0.44; €0.33) per liter for industrial use, while drivers pay 0.88 ringgit ($0.23; €0.17) per liter at fueling stations.

An illegal market has sprouted up to exploit the dual pricing scheme, in which some gasoline station owners sell the subsidized diesel to middlemen, who in turn sell it to industries, which in turn, hoard it. Also, the subsidized diesel is smuggled to neighboring Thailand, where it costs about twice as much (earlier post).

Worried by rising fuel prices, the government earlier this year imposed quotas on diesel supplied to the public stations. The restricted amount of fuel couldn’t support both the public market and the black market.

The government yesterday released the June quota of diesel to try to improve the situation.



The Government should use MyKad to track the purchase of diesel immediately. The smart credit card terminal could be use to track individual purchase via MyKad as well as tally it against the petrol station sale to individual. This will help petrol station diverting the diesel.

For future every register diesel vehical should be issued a smartcard of it own. Every purchase will be tag to the registration number. This can then be track for abnormal use.

For individual that drive a vehical not register to his name should be able to purchase it via MyKad and be track as such. If he is works as a driver of a diesel vehical that he do not own he can register as such so high usage will not raise unnecessary flag.

All purchase without MyKad or special card issued to the registered vehical will purchase at non-subsidized price and the money will be contra out with the subsidy given to the major diesel supplier,

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