Malaysia will ban gasoline stations on its borders with Thailand and Singapore from selling fuel to foreigners, in an attempt to contain the spiraling cost of subsidies, reports said yesterday.
Domestic Trade and Consumer Affairs Minister Shahrir Samad said the ban would be enforced from Friday and remain in place until the government unveils a new mechanism for selling subsidized fuel to the public.
“This move is a stern act by the government to reduce the leak in subsidies that involves high costs and which should actually be enjoyed by the lower-income group in the country,” he told Bernama news agency.
The ban affects up to 300 gas stations and extends up to 50km from the border in the northern states of Perlis, Kedah, Perak and Kelantan; and Johor in the south which faces Singapore.
The move comes as the government conducts a review of its fuel subsidies, expected to cost 43 billion ringgit (US$13.6 billion) this year if oil prices hover around US$120 per barrel.
Malaysia heavily subsidizes gasoline, diesel and natural gas as well as 21 food items, but rising global prices and controls have triggered severe shortages, as well as smuggling across its porous borders and long coastline.
Singaporeans often make day trips across the causeway linking the island state to Malaysia to fill their gas tanks and buy groceries.