SKDS Expansion Boosts Targeted Aid, Reduces Operating Costs - Analysts

By Mohamad Harith Mohamad Nizar

IPOH, June 9 (Bernama) -- Improvements to the Subsidised Diesel Control System (SKDS) mechanism can help ensure a more targeted delivery of government assistance while safeguarding the country's fiscal position, according to analysts.

Universiti Pendidikan Sultan Idris (UPSI) lecturer Prof Dr Ramlee Ismail said the move is a strategic measure to ensure effective distribution of assistance to economic sectors and micro-entrepreneurs that require support.

“The expansion of the SKDS is expected to benefit more operators involved in transportation, services, supply and delivery activities, particularly micro-entrepreneurs.

“This measure can help reduce business operating costs, enhance the competitiveness of local enterprises and ensure the smooth functioning of service and supply chains that support national economic growth,” he told Bernama.

Ramlee, who is with the Management and Economics Faculty, said for the logistics sector, including food, agriculture, educational supplies, school equipment and tourism, access to subsidised diesel would also help ensure services to the public can continue effectively.

Ramlee, who is also the International, Mobility and Advanced Education Centre director at UPSI, said the SKDS expansion is not merely a fuel subsidy initiative but also an important step towards a more efficient, sustainable and accountable assistance delivery system for the well-being of the people and the prosperity of the national economy.

“With the crisis in West Asia showing no signs of ending, the issue of oil prices will increasingly depend on how much supply is available and how long existing stocks can last,” he said.

“Therefore, prudent and needs-based consumption must also be taken into account by the government,” he added, noting that the SKDS should be supported by other policies such as expanding work-from-home arrangements nationwide for suitable sectors.

Meanwhile, Associate Professor Dr Ahmad Shahrul Nizam Isha of Universiti Teknologi Petronas said the SKDS, which now also covers jeeps and pickup trucks, is an effective government measure to reduce cost burdens on operators and small traders.

“If we look at Cameron Highlands, many vegetable growers and farm operators use pickup trucks. Small farmers and small traders use pickup trucks or jeeps as commercial vehicles,” said Ahmad Shahrul Nizam, a lecturer at the Faculty of Science, Management and Computing.

On efforts to make subsidy management more targeted, he suggested that the government require every company to provide detailed fuel usage data to prevent leakages.

“I suggest the government continuously monitor diesel usage. The government needs data, and every company should provide accurate information so that diesel consumption can be examined in detail,” he said.

Ahmad Shahrul Nizam said a comprehensive mechanism for monitoring commercial drivers and their travel routes is essential to ensure the subsidised fuel facility is not misused for personal purposes.

Meanwhile, Azizi Ahmad, the Food Security Academy director at Sultan Azlan Shah University, proposed that the government integrate the databases of the Ministry of Domestic Trade and Cost of Living and the Ministry of Agriculture and Food Security.

Azizi, a lecturer at the Faculty of Management and Information Technology, said aligning information with the Road Transport Department is equally important to ensure that jeep and pickup truck operators applying for the subsidy are genuinely involved in the agri-food sector.

“Among other improvements is the use of GPS (Global Positioning System) tracking to identify and monitor food logistics vehicles receiving this subsidy, thereby preventing leakages,” he said.

Azizi also suggested implementing targeted diesel quotas based on rural and remote geographical distances, as well as integrating artificial intelligence (AI) technology to monitor fuel transactions.

“An early warning system could be used to detect suspicious diesel purchasing patterns at petrol stations through users’ fleet cards.

“Every month or every week, they may use the fleet card many times. Through an AI-integrated early warning system, the government can monitor usage patterns of the card,” he said.

-- BERNAMA