KPDN - Perlis could soon sell unsubsidised RON 95 and diesel to foreign-registered vehicles

With Malaysia having some of the lowest fuel prices in the region, it’s probably no surprise that some foreign-registered vehicles are taking advantage of this. As such, the Ministry of Domestic Trade and Cost of Living (KPDN) is currently in the final stages of discussions to introduce new regulations on the sale of non-subsidised fuel in border areas.

According to Bernama, KPDN secretary-general, Datuk Azman Mohd Yusof said the programme called ‘Border Economy – Supply of RON95 petrol and diesel without subsidy’ would allow the purchase of unsubsidised fuel by foreign registered vehicles in states that border neighbouring countries.

“This step is taken to curb the issue (leakage) faced and does not have a negative impact on foreign vehicles that fill up fuel,” he said. “The price of fuel without the subsidy (RON95 and diesel) is still cheaper than that sold in neighbouring countries.” Subsidised RON 95 is capped at RM 2.05 per litre while subsidised diesel is RM 2.15 per litre.

This move was made as there were reported cases of foreign vehicles filling with subsidised diesel in limited quantities but at multiple petrol stations.

Also read: No more subsidies? KPDNHEP mulls new rules to curb foreign vehicles from filling subsidised fuels

KPDN issued a directive on 17-June that limits foreign-registered vehicles to only fill up to 20 litres of RON 95 and diesel. Meanwhile, RON 97 and other unsubsidised fuels can be sold without limit to foreign vehicles.

“The leakage of subsidised RON 95 and diesel in the states near the border is taken seriously by KPDN because the subsidies that should be enjoyed by the people of this country are also enjoyed by foreigners,” he was quoted by the national news agency.

Also read: Tengku Zafrul: T20 enjoying RM 2 bil more in fuel subsidies than B40

The programme would start on a pilot basis in Perlis since there are commercial petrol station operators that sell unsubsidised fuel in the border towns of Padang Besar and Wang Kelian. The ministry is also currently negotiating with oil companies to also offer unsubsidised fuel in the state.

The pilot programme is expected to start in January 2023 and the impact study will be carried out within 3 months before a decision is made to roll it out in the other border states.