MALAYSIA: more on fuel subsidies

In March 2011 I wrote a post on Malaysia's subsidies to fuel used by fishermen.

In recent articles the Malaysian press has echoed the unhappiness of license holders of so called “C2 trawlers” about the removal of a super-subsidy given by the government.

These trawlers are offshore vessels of 70 GRT and above and operate beyond 30 nautical miles off the coast. Until 31 May 2011 these trawlers could buy diesel at the price Malaysian Ringgit or RM 1.25 (or 0.41USD). After that date they price they pay is RM 1.80 (or 0.59 USD).

According to the government, this is still a subsidised price.

As to how this super-subsidy worked one of the articles (1) mentions that:

“The government subsidises 25,000 to 28,000 litres of diesel equivalent to RM31,250 (10,271 USD) and RM35,000 (11,503 USD) for each vessel every month and all Zone C2 vessels could use up to an average of 14 million litres of diesel every month”

Here are links to press articles on this issue:

(1)    http://www.theborneopost.com/2011/06/08/trawler-operators-still-enjoying-subsidy-for-diesel/
(2)    http://www.freemalaysiatoday.com/2011/05/19/trawler-operators-upset-over-subsidy-move/

MALAYSIA: fuel subsidies

Malaysia is one of the countries in South East Asia that provides subsidies to its fishermen.

The Start Online reported last year (13 July 2010) on the answer by Agriculture and Agro-Based Industry Minister Datuk Noh Omar to a question by MP Datuk Sapawi Ahmad. Mr Sapawi asked on amount of subsidies distributed to traditional fishermen and ministry efforts to curb overfishing by licensed trawler boats.

According to the newspaper article:

"The government distributed 4.66 billion litres of subsidised diesel and 314.55 million litres of petrol worth RM3bil to fishermen in the last four years. Some 6.075 tonnes of fish worth RM36.45bil were landed from 2006 to 2010. The subsidies help to meet fuel cost, which comprises 70% of their operating cost."

The equivalent of RM (Malaysia Ringgit) of 3 billion is, at today's exchange rate, USD 990 million. This means that a yearly fuel subsidy of USD 247,5 million was provided by the government to fishermen in that country.

Compared to the total value of landings (yearly average of RM 9.11 billion or USD 3 billion) the yearly fuel subsidy represented around 8% of the total value of the catch.

Here is the link to the article:

http://thestar.com.my/news/story.asp?file=/2010/7/13/nation/20100713151942&sec=nation

MALAYSIA: fishermen should stop relaying on (fuel) subsidies.

Malaysia's Deputy Agriculture and Agro-based Industry Minister Johari Baharum said a few weeks ago, “All industries in Malaysia have asked for help, and we have given so many subsidies”.

Citing fishermen as an example, he said, “We give each fisherman RM200 (USD 64) a month as well as fuel subsidies and incentives."

He said this in October 2010 in the framework of the Aquafair Malaysia 2010 at the Kuala Lumpur Convention Centre.

Here is the link to the article.

http://freemalaysiatoday.com/fmt-english/politics/barisan-nasional/11414-agri-sector-must-stop-relying-on-subsidies-says-johari

MALAYSIA: problems in the distribution of fisheries subsidies

In my post on Malaysia’s subsidies of 23 December 2008 I was referring to subsidies provided by the Malaysian authorities to fishermen.

Recent press reports indicate that difficulties are arising in the distribution of the subsidies. One of the difficulties is, as said by the press, that “the cost of the fuel for them [the fishermen] to get to petrol kiosks to collect the subsidy was higher than the benefit they derived from the subsidy.”

To avoid this type of situation the government is thinking of distributing the fuel subsidy “at jetties, including fish-landing jetties”.

Another issue that the government is considering is to change the frequency (daily, weekly, monthly) when paying another subsidy, i.e. the catch incentive of 10 sen per kilogram.

Here is the link to an article in BERNAMA on this topic:

http://www.bernama.com/bernama/v5/newsgeneral.php?id=421268

MALAYSIA: more subsidies to fishermen

As part of its second economic stimulus package the Mlaysian government has decided to help fishermen affected by disasters at sea by setting-up a Fishermen's Welfare Fund with an initial allocation of RM2 million (or USD .54 million), which would be managed by Lembaga Kemajuan Ikan Malaysia (the Fisheries Development Authority of Malaysia).

Here are links to news articles on this Fund:

http://www.nst.com.my/Current_News/NST/Wednesday/National/2501685/Article/index_html

http://www.bernama.com.my/bernama/v3/news.php?id=395159

http://thestar.com.my/news/story.asp?file=/2009/3/11/minibudget/20090311074124&sec=minibudget

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:

http://www.pmo.gov.my/?menu=newslist&news_id=113&news_cat=13&page=1731&sort_year=&sort_month=

http://www.bernama.com/bernama/v5/newsgeneral.php?id=378070