Diesel quota hikes should follow actual usage patterns, economist warns

Economist Tan Peck Leong has called for a more rigorous approach to diesel quota management, emphasizing that any expansion of allocations must be grounded in real usage patterns rather than political demands.

Tan's remarks come as policymakers continue to grapple with balancing fuel subsidies and supply management across the region. He stressed that quota increases should be determined by comprehensive analysis of actual consumption trends, ensuring that allocation decisions reflect genuine market needs rather than short-term political pressures.

The economist's position underscores ongoing debates in Malaysia about fuel subsidy policy and its long-term sustainability. Officials have faced mounting calls to review diesel quotas, but Tan warned that ill-considered expansions could create inefficiencies in the supply chain and distort market dynamics.

Data-driven policymaking on fuel quotas could help ensure that subsidies reach those who genuinely need them while maintaining fiscal responsibility, experts suggest. Tan's recommendation aligns with broader efforts across Southeast Asia to make energy policies more efficient and evidence-based rather than reactive to political cycles.