The Federation of Malaysian Consumers Associations (FOMCA) welcomes the government’s decision to expand the Subsidised Diesel Control System (SKDS) eligibility for jeeps and pick-up trucks nationwide, particularly for operators involved in land freight transportation.
The move is timely as transportation and logistics costs continue to contribute to higher prices of food, agricultural produce and daily essentials faced by consumers.
According to the Ministry of Domestic Trade and Cost of Living (KPDN), the improved SKDS mechanism will allow companies nationwide that own jeeps and pick-up trucks for land freight purposes to register under the system beginning 1 June 2026. The government has also expanded eligibility to certain vehicles previously registered under individual ownership, subject to company registration and transfer of vehicle ownership requirements.
FOMCA appreciates the government’s continued efforts in addressing the rising cost of living amid ongoing global economic uncertainty and geopolitical tensions that have contributed to higher global fuel and commodity prices. These external pressures are affecting many countries, including Malaysia.
In this challenging environment, consumers understand that the government is doing its best to balance the need to protect rakyat welfare while ensuring the sustainability of national finances.
While the expansion of diesel subsidies may help reduce transportation costs, FOMCA stresses that there is no automatic guarantee that the savings will be passed down to consumers in the form of lower prices. Fuel and logistics costs are important components within the supply chain. However, effective monitoring and enforcement are necessary to ensure that cost savings are reflected in retail prices instead of being absorbed as additional profits by certain parties.
FOMCA therefore urges the government, particularly KPDN, to strengthen monitoring of essential goods prices and regularly assess whether the subsidy mechanism is genuinely helping to stabilise prices for consumers.
At the same time, FOMCA understands the rationale behind requiring individual vehicle owners to formalise their businesses before accessing the subsidy, as this would improve accountability, governance and reduce subsidy leakages.
However, FOMCA believes this requirement may unintentionally affect smaller and informal operators, including small farmers, rural transporters and self-employed delivery operators who may lack the financial resources, awareness or digital literacy needed to complete company registration and vehicle ownership transfer procedures.
To ensure inclusivity, FOMCA encourages the government to provide simplified registration procedures, mobile assistance programmes, awareness campaigns and temporary support measures to help smaller operators adapt to the new requirements.
FOMCA also supports the government’s move to tighten controls under SKDS, including the implementation of fixed monthly quotas and stricter fleet card management to curb leakages and abuse of subsidised diesel.
With more than 432,000 vehicles now eligible under the subsidy system, FOMCA believes stronger enforcement, periodic audits and closer inter-agency cooperation are essential to prevent misuse and illegal resale of subsidised diesel.
Consumers should also be provided with accessible complaint channels if there are operators who continue imposing unreasonable price increases despite benefiting from subsidised fuel assistance.
Ultimately, while targeted subsidies can help cushion the impact of global fuel price volatility and geopolitical instability, all parties including the government, industry players and consumers must work together responsibly to navigate these challenging economic conditions.
Dr. Saravanan Thambirajah
Chief Executive Officer