Federation of Sabah Lorry Transportation Associations 沙巴羅厘總會: Letter to Ministry of Domestic Trade and Consumer Affairs on Diesel Subsidy

EAST MALAYSIA LORRY ASSOCIATIONS

Gabungan Persatuan Pengangkutan Lori Sabah & Persatuan Lori Sewa Sarawak

(Federation of Sabah Lorry Transportation Associations & Sarawak Hire Lorry Association)

Date : 28^th May, 2007

KEMENTERIAN PERDAGANGAN DALAM NEGERI

DAN HAL EHWAL PENGGUNA MALAYSIA

Aras 9, Lot 2G3, Persint 2

Pusat Pentadbiran Kerajaan Persekutuan

62623 Putrajaya, MALAYSIA.

U.p.: Doktor Muzahet Bin Masruri - Pengarah

RE : DIESEL SUBSIDY

With reference to the previous meeting between KPDN and East Malaysia Lorry Associations on the above-mentioned diesel subsidy on 27^th March, 2006 at Putra Jaya, it has been more than a year since KPDN implemented the diesel subsidy of 15 sen/ litre for general, non-industrial and non- agricultural cargo lorries. The majority of the Association’s members felt that they have been neglected in all aspects by the Ministry of Domestic Trade and Consumer Affairs (Kementerian Perdagangan Dalam Negeri Dan Hal Ehwal Pengguna Malaysia), in dealing with the subsidy issue. Transportation sector in East Malaysia plays a very important role in the development of agricultural, infrastructures, tourism etc. Therefore diesel is very essential and it directly impacts on the development of the sectors mentioned above.

Some of the Association’s members have received letters of approval for the monthly diesel subsidy of 1,800 litres and 2,160 litres for general cargo truck and prime-mover respectively. The quantity of subsidy provided above, constitute only 20-25% of the actual monthly consumption of these lorries. The roads and terrains situation in Peninsular Malaysia are very different from the ones in East Malaysia, where the later is very hilly, mountainous and rough terrain roads and consumption of diesel are amongst the highest in the country. Sighting the comparison of the usage of diesel per litre basis between :

Peninsular Malaysia 2.0km to 2.5km; and

East Malaysia 0.9km to 1.0km

For another comparison, it is very apparent that the use of tubeless Bridgestone tyre in Peninsular Malaysia can cover 120,000km and whereas in East Malaysia it can only cover 60,000km. This is due to the different geographical conditions between Peninsular and East Malaysia.

The diesel subsidy eligible for general cargo such as Isuzu Cargo Light Truck (2-3 tonner) with BDM between 2,500 - 3,000kg and 70 - 80 hp is given 1,800 litres per month and similarly big general cargo truck (8-10 tonner) with BDM of 21,000kg and 320 - 360hp is only allocated 1,800 litres per month and it is relatively not sufficient.

On the other category of vehicle such as prime-mover V10 with BDM 36,000 – 38,000kg and engine capacity of 350 – 420hp is only allocated diesel subsidy of 2,160 litres per month and the 20,000 – 30,000 litres per month of diesel subsidy provided to the fishing boat with engine capacity of 350-500hp, in comparison between the two, prime-mover’s subsidy is relatively small.

In the approved 21 types of vehicles eligible for diesel subsidy, there are 2 types of vehicles which were omitted i.e. dump truck and oil tanker truck. The dump trucks with permit “A” are majority used for loading of bulk palm kernel expeller, fertilizer, maize and agricultural produce; transporting from ports to storage depots and vise-versa for import and export purposes. Besides this, the use of oil tanker trucks is to transport diesel/fuel oil to IPP power stations and also to petrol stations. In view the above, dump truck should be included in the general cargo category and oil tanker truck in water tanker truck category of subsidy.

It is a general view of the Association's members that subsidy covers only limited types of trucks, and the majority of East Malaysia consists of palm oil and chemical tankers, diesel/petrol tankers, low loaders, cargo trucks, dump trucks and prime-movers and the subsidy does not benefit much to East Malaysia.

The Association hopes that the Ministry would sympathize with Sabah and Sarawak states which are still developing and unavoidable the high usage of diesel for transportation and appeal to the Ministry to play a balancing role and the Association recommends that :

to increase the diesel subsidy quota to 4 times of the existing quota i.e. 1,800 litres x 4 = 7,200 litres and 2160 litres x 4 = 8,640 litres per month;

the Association appreciate the subsidy of RM0.15 per litre provided by the Ministry to the transporters, but felt that the Ministry should dully consider allocating to transporters the same amount of subsidy as provided to fishing boats; and

the abuse of subsidized diesel is no longer a major problem since KPDN has implemented the DNA identification to subsidized diesel. The Ministry would allow the Association to play the role in the distribution of subsidized diesel to genuine transporters and regulate them to avoid further abuse of subsidized diesel.

The Association would like to call on you and further discuss the above-mentioned diesel subsidy in June 2007 if it is permissible.

Last but not least, we look forward to your confirmation of the meeting.

Thank you and warmest regards,

For GABUNGAN PERSATUAN PENGANGKUTAN LORI SABAH &

PERSATUAN LORI SEWA SARAWAK