KUALA LUMPUR, Oct 14 (Bernama) -- After much anticipation, the Malaysian government implemented its plan for targeted diesel subsidies in Peninsular Malaysia on June 10, 2024.
As a result, the retail price of diesel in Peninsular Malaysia increased from RM2.15 to RM3.35 (up nearly 56 percent), but diesel prices in Labuan, Sabah and Sarawak remained unchanged at RM2.15 per litre. As of the week of October 10, the price of diesel has dropped to RM2.95 to reflect the decrease in global crude oil prices.
This measure was seen as a way forward in curbing the rampant diesel leakages and smuggling that were taking place in the country, which had already cost Malaysia billions of ringgits in losses. It was also a way to cut government spending on diesel subsidies which went from RM1.4 billion in 2019 to RM14.3 billion in 2023 - a whopping 921 percent increase in five years.
Many, though, still have questions over this latest fuel measure from the government and have turned to Google for answers.
Analysis of Google search data from January 1, 2023, to June 30, 2024, showed a large spike in search interest on ‘diesel fuel’ between June 9 and June 15, 2024. The sudden surge in searches using this term may have been fuelled by the announcement of the implementation of targeted subsidies for diesel.
On June 9, 2024, Finance Minister II, Datuk Seri Amir Hamzah Azizan, announced that on June 10, 2024 diesel fuel prices in Peninsular Malaysia will be set at RM3.35 per litre (reflecting the market price without subsidy). He also announced that the same date would see the beginning of the disbursement of the BUDI MADANI cash assistance.
Bernama decided to compare Malaysia's search interest in ‘diesel fuel’ in the month before the start of the targeted diesel subsidies (May 9, 2024, to June 9, 2024) against the week following the start of the targeted subsidies (June 10, 2024, to June 16, 2024).
On June 9, 2024, Finance Minister II, Datuk Seri Amir Hamzah Azizan, announced that on June 10, 2024 diesel fuel prices in Peninsular Malaysia will be set at RM3.35 per litre (reflecting the market price without subsidy). He also announced that the same date would see the beginning of the disbursement of the BUDI MADANI cash assistance.
Bernama decided to compare Malaysia's search interest in ‘diesel fuel’ in the month before the start of the targeted diesel subsidies (May 9, 2024, to June 9, 2024) against the week following the start of the targeted subsidies (June 10, 2024, to June 16, 2024).
In the month leading up to the implementation of targeted subsidies, states in Malaysia's north and east coast, such as Pahang (100), Kelantan (94), Terengganu (90), Kedah (77), and Perlis (76), exhibited the highest search interest for the term ‘diesel fuel’.
Notable breakout related topics included ‘Fuel’ in Pahang, ‘Toyota Hilux’ in Kelantan, ‘Oil’ in Terengganu and Kedah, and ‘Subsidy’ in Perlis.
Google uses the term ‘Breakout” to mark interest in search terms that grew by more than 5000 percent.
This trend continued into the week following the start of the subsidies, with Kelantan (100), Kedah (95), Pahang (95), Perak (85), and Terengganu (76) leading in search interest. Topics like ‘Petrol’ in Kelantan, ‘Fuel Card’ in Kedah, and ‘Vehicle’ in Terengganu also saw significant spikes in interest during this time.
During the same periods, cities and towns from the north and east coast also dominated the search rankings.
Between May 9, 2024, and June 9, 2024, seven out of the top 10 cities that googled ‘diesel fuel’ were from this region, with Pantai Remis (Perak), Ayer Hitam (Johor), Tanjong Sepat (Selangor), Raub District (Pahang), Chukai (Terengganu) among the top.
In the following week (June 10-16, 2024), nine of the top 10 cities were from the same area, with Simpang (Perak), Batu Kurau (Perak), and Brinchang (Pahang) leading in search interest.
No data was available for Labuan as it had little to no search interest in ‘diesel fuel’ on Google. The term was also not very popular in Sabah and Sarawak - with both states consistently on the lower end of the search interest rankings in both time periods.
The steady interest in ‘diesel fuel’ in Malaysia's north and east coast states reflects public concern over the impact targeted diesel subsidies might have on the region. Diesel fuel is critical for transportation and business operations, as well as for agriculture and fishing, which are major industries in these areas.
Diesel is the fuel that powers the agricultural and fishing sectors in Malaysia. Agricultural machinery and equipment, along with fishing boats and trawlers, rely on diesel to keep the industries running and alive.
Estimates provided by the Department of Agriculture in 2022 showed the highest concentration of farmers in Peninsular Malaysia (68.2 percent) were located in the north and east coast.
Kedah had the most farmers (66,886), followed by Johor (64,501), Kelantan (50,765), Pahang (44,253), Perak (43,694), Selangor (20,966), Perlis (18,201), Terengganu (14,286), Penang (8,741), Negeri Sembilan (8,474) and Malacca (8,254).
The north and east coast of Peninsular Malaysia also has the highest concentration of fishermen, accounting for 65.7 percent of the total.
Based on the 2021 Registrar of Fishermen Association, Perak had the largest number of fishermen (13,194), followed by Johor (8,580), Kedah (8,022), Terengganu (6,586), Penang (5,684), Kelantan (3,962), Selangor (3,732), Perlis (3,144), Pahang (2,638), Malacca (1,068) and Negeri Sembilan (558).
Reflecting this, fishermen in these regions also received the bulk of the subsidised diesel fuel, making up 77.2 percent of the total.
According to the Fisheries Development Authority of Malaysia (LKIM), fishermen in Perak received the most subsidised diesel in 2021 (3,823). This is followed by Selangor (1,535), Kelantan (1,477), Kedah (1,121), Terengganu (1,008), Pahang (847), Perlis (616), Johor (571), Penang (410), Malacca (81) and Negeri Sembilan (24).
The correlation between the concentration of fishermen and diesel allocation highlights the vital role fuel subsidies play in supporting these coastal communities.
People that googled for the term 'diesel fuel’ in the month before the start of the targeted diesel subsidies also combed through Google for a number of different topics.
The 10 topics that had a sudden high interest, or breakout, in searches were identified (in descending order) as ‘Ministry of Domestic Trade and Cost of Living’, ‘Aid’, ‘Qualification’, ‘Individual’, ‘Luxury Car’, ‘Peninsular Malaysia’, ‘KIA Sorento’, ‘Mechanic’, ‘Diesel Multiple Unit’ and ‘Sulfur’.
The number one breakout related topic, ‘Ministry of Domestic Trade and Cost of Living’, refers to Malaysia’s Ministry of Domestic Trade and Cost of Living (KPDN). It is the ministry responsible for matters related to the development of domestic trade and consumerism and is one of the ministries involved in implementing the current targeted subsidies for diesel fuel. KPDN also oversees the MySubsidi Diesel system.
There is a marked difference in results prior to the restructuring of diesel subsidies, compared to the breakout related topics in the week following the start of the targeted diesel subsidies.
The number one breakout related topic during this period was ‘Smuggling’. Malaysia has long been plagued by issues with diesel smuggling, especially with illegal cross-border diesel activity with neighbouring Thailand.
The 10 topics at this time were (in descending order) ‘Smuggling’, ‘Fuel Efficiency’, ‘Anwar Ibrahim’, ‘Malaysian Islamic Party’, ‘Permit’, ‘Ministry of Finance Malaysia’, ‘Nissan Navara’, ‘BHP’, ‘Toyota Fortuner’ and ‘Grant’.
A 2017 report on the worldwide theft of refined oil products mentions that Thai authorities had since the mid-1990s identified massive diesel and petrol smuggling operations in the country, especially in its southern provinces bordering Malaysia. It has been estimated that up to three million litres in fuel are smuggled daily over land from Malaysia to Thailand, with an annual value of US$1.2 billion (≈RM5 billion) in Thailand and US$0.54 billion (≈RM2.2 billion) in Malaysia.
In addition to smuggling, diesel leakages have also become a concern for the government. According to the government, leakages caused by the continued misuse of subsidised diesel by ineligible commercial parties, such as construction companies, have contributed towards the increased use of subsidised diesel in the country. From 2019 to 2023, use of subsidised diesel rose from 6.1 billion litres to 10.8 billion litres, while usage of unsubsidised commercial diesel decreased by more than 2 billion litres for each year.
Due to rising cases of smuggling and misappropriating controlled and subsidised goods (including diesel), KPDN launched Ops Tiris last year. During Ops Tiris 1.0 and 2.0, which took place from March 1, 2023, to December 31, 2023, a total of 15,927 inspections were carried out nationwide at petrol stations, wholesalers, manufacturers, quarries, control posts and other premises. A total of 877 cases of diesel leakages and smuggling were identified in that time, with 6,441,118 litres of diesel worth RM14.2 million seized.
Enforcement of Ops Tiris 3.0 from the date of January 1, 2024, until June 22, 2024, identified 570 cases of diesel leakages and smuggling. More than 5.1 million litres of diesel worth nearly RM12 million have been seized.
The hope is that the targeted diesel subsidies would help reduce such activities from continuing to take place in the country. So far, the early indicators from the government look promising.
As previously reported by Bernama, the government estimates that it has prevented over RM250 million worth of diesel leakages and smuggling since the implementation of targeted diesel subsidies on June 10.
KPDN’s Deputy Minister, Fuziah Salleh, had also informed the Dewan Rakyat that there had been a 27 percent decrease in retail diesel sales in the first week of the targeted subsidies. There had also been an increase in commercial diesel sales (44 percent) and a 24 percent decrease in diesel sales at the border.
She also mentioned that a comparison of Ops Tiris data from 20 days before the start of the targeted subsidies and 20 days after it was started showed a 78 percent decrease in diesel leakages and an 87 percent decrease in diesel seizures.
During the period between May 9, 2024, to June 9, 2024, people in Malaysia that googled the term ‘diesel fuel’ also had search queries that rose in popularity concurrently.
The 10 breakout queries were ‘Budi’, ‘Madani Diesel’, ‘Budi Madani’, Budi Madani Diesel’, ‘Subsidi Diesel Madani’, ‘Subsidi Diesel Budi Madani’, ‘柴油 津贴 (Diesel Allowance)’, ‘Harga Diesel Semasa’, ‘Permohonan Subsidi Diesel’ and ‘Diesel Naik Harga’.
From the looks of it, people had a keen interest in finding out information about the governments’ BUDI MADANI programme. BUDI MADANI introduced diesel fuel assistance through the BUDI Individu and BUDI Agri-Komoditi initiatives. BUDI Individu provides RM200 per month in aid to eligible Malaysian individuals owning diesel-based personal vehicles. BUDI Agri-Komoditi gives RM200 per month in aid to eligible small-scale farmers and commodity smallholders. There is no registration deadline for the programme.
It’s estimated that nearly 300,000 owners of diesel-based personal vehicles in Peninsular Malaysia are qualified to receive aid under BUDI Individu. Meanwhile, nearly 400,000 small-scale farmers and commodity smallholders are qualified to receive aid under BUDI Agri-Komoditi. As of June 19, 2024, the Ministry of Finance has approved 100,000 aid applications for BUDI Individu and BUDI Agri-Komoditi.
In comparison, people that googled ‘diesel fuel’ between June 10, 2024, to June 16, 2024, had more queries related to the diesel fleet card.
The 10 breakout queries at this time were ‘Bantuan Subsidi Diesel’, ‘Shell Fleet Card’, ‘Harga Diesel Sebelum dan Selepas’, ‘Wira Diesel’, ‘Lori Rigid’, ‘Diesel Fuel Subsidy Malaysia’, ‘Fleet Card’, ‘Diesel Fuel Subsidy’, ‘KPDN’ and ‘SKDS’.
The diesel fleet cards are a part of the Subsidised Diesel Control System (SKDS) initiative which is under KPDN’s MySubsidi Diesel programme. These cards enable eligible land transport and logistics companies to buy subsidised diesel at fuel retail stations. Currently, only 33 types of vehicles are qualified for SKDS.
KPDN’s Minister, Datuk Armizan Mohd Ali, had announced that the five oil companies (BHPetrol, Caltex, Petron, Petronas and Shell) participating in distributing cards through SKDS would assist in collectively providing one million fleet cards so that a continuous supply of cards is available for SKDS 2.0 (Phase I and II).
A total of 165,897 fleet cards have so far been issued to eligible companies. As of July 14, 248,887 diesel subsidy applications for vehicles under the SKDS initiative have been approved. However, recent data from KPDN showed that registration of vehicles eligible for SKDS is still unsatisfactory with only around 259,000 out of 410,000 vehicles registered.
-- BERNAMA
About the Data
Please take note that the data collected through Google Trends is accurate as of July 9, 2024. Google Trends normalises search data to make comparisons between terms easier. Search results are normalised to the time and location of a query. Google Trends data reflects searches people make on Google every day, but it can also reflect irregular search activity, such as automated searches or queries that may be associated with attempts to spam Google’s search results.