Commercial vehicles will no longer enjoy cheap RM1.481 per liter diesel from June 2011

Diesel drivers have been enjoying their RM1.80 per liter of subsidised diesel that can take them over 1,000km per full tank, but commercial vehicles have been enjoying their diesel even more – certain industries get super subsidies that result in a per liter price of RM1.481 for diesel.

If your business falls under these 9 categories, you’ve probably been enjoying super cheap diesel thanks to your subsidy fleet card – prime movers, general cargo movers, Luton box vans, vans, rigid lorries for bottled beverages, rigid tanker lorries for flour transport, rigid lorries for refrigerated goods, water tankers and limousine taxis.

I know for a fact that these subsidy cards can be abused and are being abused as I know someone who enjoys fueling his pickup truck with super-subsidised diesel thanks to a card that he got from a relative who runs a business that qualifies for the subsidies.

But when even RON95 and RON97 price hikes can affect the prices of goods and services that the everyday rakyat consume, what more a hike in the price of diesel fuel that’s used by these lorries that run everyday and perform services that are essential to the economy?

That’s exactly what the government is going to do – it announced earlier this week that it will be removing this super subsidy, which means everyone will have to pay the same RM1.80 per liter of diesel. That’s about a 20% hike in fuel costs, and the government will supposedly save RM659.3 million in 2011 alone from this action.

I wonder what’s the real situation with the government coffers right now as I consider this to be sort of an extreme measure relative to any previous subsidy cutting. The government has in the short term only resorted to removing subsidies for RON97, a so-called “luxury” fuel, and have promised to only revise the “everyday man” RON95 fuel every six months. They rarely touch diesel as diesel practically runs the country’s logistics.

Other than the fact that this might and most definitely will increases the prices of certain goods and services, there’s also the danger of lorries resorting to overloading to be so-called “more efficient” per trip. It’s not like they don’t already do that.

Read more at TMI.

© 2011 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Wed, 18 May 11 15:39:14 +0000.

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