Malaysia has removed fuel subsidies to encourage its citizens to transition to renewable energy for their vehicles. Specifically, subsidies for RON 97 petrol and diesel fuels were removed in hopes of advancing the country’s goal of decarbonisation.
LESS FUEL, MORE EVs
Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad has high hopes for this removal to encourage the EV shift in the country. According to Nik Nazmi, Malaysian citizens are reliant on petrol and fuel due to its cheap prices. Removing the subsidy could encourage Malaysians to turn to renewable energy sources instead.
Though widely used across Malaysia, subsidies will also be removed for RON 95, another type of petrol. A difference in prices for RON 95 could spell significant financial adjustment for petrol vehicle drivers in Malaysia.
Nik Nazmi, head of Malaysia’s national decarbonisation committee, is cautious about the implementation of the removal. The Malaysian Minister cited his book, “Saving the Planet: Climate and Environmental Lessons from Malaysia and Beyond,” while recounting an example of Mayor Sadiq Khan of London, England. Khan launched an “ultra low emission zone” within the European city where non-low emission vehicles are charged GBP 12.50 (AUD 24.88) per day if they enter. Not all bode well for this policy as it received some public backlash, a reaction Nik Nazmi hopes to avoid.
According to Nik Nazmi, severe public backlash could not only cost him his position but also derive the government of power. Despite this, the minister is hoping to implement the fuel reform delicately. “It’s good for the country’s treasury. It’s good for the environment and I think it’s the right transition that we want to pursue,” said the minister.
WHAT THE MAA SAYS
In a similar vein, the Malaysian Automotive Association (MAA) supports the Malaysian government’s low-emission vehicle incentives. Both organisations aim for half of new car sales in 2040 to be comprised of hybrids and EVs.
However, the MAA is pleading with the government to extend and expand current hybrid policies. “In order for our industry to continue growing, the momentum should be longer because that’s where we will be able to have a more significant market before any investments are considered. So, a short burst of volume is difficult for any principal to plan long-term production of expansion,” said Mohd Shamsor Mohd Zain, MAA President.
It is unclear whether the Malaysian government will honour the MAA’s wishes. However, it is worth noting that both institutions aim for the same goal.
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