S'pore bus tours charging more after diesel subsidy reform proves my policy is working: Anwar

Malaysian Prime Minister Anwar Ibrahim said on Jun. 18 that Singaporean travel agencies and tour buses increasing fares, after he adjusted the subsidy for diesel in Malaysia, was proof that his initiative is succeeding and should be continued.

Foreign beneficiaries

Anwar, speaking at a Hari Raya event in Penang, claimed that rather than benefiting the people of Malaysia, much of the subsidy’s benefit was being given to foreigners, as reported by Bernama.

According to Anwar, tour buses and travel companies from Singapore were now seeking to raise prices due to the inability to obtain diesel subsidies.

Reports have shown travel agencies offering cross-border services are planning to increase their fees by up to 10 per cent, specifically citing the end of diesel subsidies for tour bus operators.

Anwar also said that Thai fishermen in particular, were benefiting from the previous regime of subsidies and has also directed his government to enforce stricter border control efforts to halt the smuggling of diesel out of the northern Malaysian States.

“Which means for decades our subsidies went to Singapore companies, to Thai fishing boats. A lot of funds were leaking. “

Anwar said 3.8 million foreigners had benefited from diesel being taken out of Malaysia, to Thailand.

“Malaysian taxpayers are paying but foreigners are reaping the benefits.”

Anwar also admitted the diesel subsidy rationalisation program had faced several issues, but in time they would be rectified.

Financial reform

Malaysia is currently going through a series of fuel subsidy rationalisations, beginning with the end of blanket diesel subsidies, to be eventually replaced with a targeted subsidy model.

Diesel had been subsidised by the Malaysian government for over two decades.

But ever since taking power, Anwar has consistently warned that fuel subsidies, which also includes petroleum, would be significantly reduced, finally revealing his plans in May 2023.

Anwar has regularly made the case that significant financial reforms are required in Malaysia or the country would face financial ruin.

But at the same time, Malaysians are currently caught in a significant cost of living crisis, and Anwar has had to carefully navigate the twin challenges of raising government revenue, while not allowing the cost of living to spiral further.

The recent end of blanket subsidies for diesel has been cast as targeting subsidy leakage due to foreigners taking advantage of subsidies meant for Malaysians, but it leaves many Malaysians worried about the prospect of anything involving transport getting more expensive.

The end of blanket petrol subsidies is also planned, while diesel subsidy rationalisation is not yet in effect in East Malaysia.

At the same time, the Malaysian government has also engaged in other means of dealing with the cost of living crisis, such as subsidising the price of eggs, albeit by S$0.0086 per egg.

Anwar has also raised the wages of Malaysian civil servants in recent months , increasing their salaries by 13 per cent.

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Top image via Anwar Ibrahim/Facebook