Subsidised Diesel Part 1

By All That I Know ..

SKDS was introduced in Mac 2006 to overcome the abuse in the sale of subsidised diesel at petrol stations. It is also a smart card, which allows transport companies, which makes up 84% of diesel users, to buy diesel at petrol stations at RM1.43 per litre; 15 sen cheaper than the pump price of RM1.58 per litre (price as of 28/2/06).

After that hair raising increase of 30sen on 28 Feb 06, pump price for diesel remains at RM1.58/ltr until 04 June 08. Meaning transport companies enjoyed an extra 15sen/ltr subsidy in 2006, 2007 and up to 4th June 08.

Now look at below article from NST 17 July 08.

In this article, Dato’ Ismail Ahmad is talking about fleetcard subsidy for transport. I know you can’t read a thing coz it is so small (damn this standard blog template). That’s alright, the only important part of the article is the stats.

Total Usage and Subsidy of Diesel
Usage = 581 million litres
Total Subsidy = RM106.33 million

Usage = 1,037 million litres
Total Subsidy = RM189.70 million

If I take Total subsidy (RM million) divide by Usage (million litres) I will get fleetcard subsidy RM/litre. OK, lets do that now:

2006 = RM106.33mil / 581 mil ltrs = RM0.18/ltr
2007 = RM189.70mil / 1,037 mil ltrs = RM0.18/ltr

Voilà!! The stats just gave me fleetcard subsidy per litre which is 18sen.

Time out..
Am I senile? Didn’t I just mention 15sen just now? Wasn’t it splashed all over the newspapers since 2006 it was 15sen and NOT 18sen?
Did Dato’ Ismail Ahmad just made a mistake or even worse NST published the wrong figure??

Nope. It’s none of the above. Dato’ Ismail Ahmad was of course correct and NST did publish the correct figure and I am not senile. Yes, dear fellow taxpayers, the extra subsidy IS 18sen and NOT 15sen.

So what is that 3sen for and what’s the big deal?

Read more at: Subsidised Diesel Part 1 and Subsidised Diesel Part 2