Malaysia: changes in fuel subsidies for fishermen

In Malaysia the government provides fishermen with subsidised fuel.

The government decided, effective 5 June 2008, to "streamline" the price of diesel (for fishermen and vessel owners) at RM1.43 (US$ 0.41) per litre. Before the price of diesel for fishermen was RM1 (US$ 0.30) per litre and for vessel owners buy the proce was RM1.20 per litre.

Though the government provided some relief to the above categories of users and agreed to pay in cash a portion of the difference in the old and new prices to fishermen and vessel owners, as follows:

- Payment of RM200 (US$ 58) cash monthly to every owner and crew of Malaysian-owned vessels registered with the Fisheries Department.
- Payment of incentives to vessel owners at the rate of 10 sen per kg of fish landed by approved fishing vessels at fish landing centres in the country.

The payments are managed by the Malaysian Fisheries Development Authority.

Thereafter, effective Dec 16, the price of subsidised diesel and petrol for fishermen was reduced reduced from RM1.43 per litre to RM1.30 per litre. Accordng to the goverment with new price, the government would have to bear additional cost of about RM197 million (US$ 57 million) nnually.

At the same time the government maintains the RM200 monthly cost of living allowance for fishing vessel operators and fishermen on licensed vessels as with the incentive of 10 sen per kg given for the catch landed.

The reduction in price of subsidised diesel and petrol would mean savings in fuel cost of RM260-RM4,160 monthly depending on the fishing zone and vessel size."Traditional net vessels operating in Zone A (up to 5 nautical miles) will save RM260 monthly, dragnet vessels in Zone B (5-12 nautical miles) will save RM2,600 monthly."Dragnet vessels in Zone C (12-30 nautical miles) will save RM3,120 monthly and dragnet vessels in Zone C2 (over 30 nautical miles) will save RM4,160 monthly.

Furthermore the authorities have on 3 November 2008 increased the subsidised diesel and petrol quota from 106 million litre monthly to 126 million litre to accommodate the issuance of 15,900 new fishing vessel licences by the Fisheries Department."Following requests from dragnet vessel operators, the government also approved additional quota of 4,000 litres monthly to vessels fishing in Zone C dan C2."He said the price reduction and additional diesel and petrol quota should give fishermen higher returns due to the costs saved.

Here are the links to the official press releases:



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