THE government is examining the need to expand targeted subsidies to include RON95 petrol, Economy Minister Rafizi Ramli told parliament today.
For the time being, he said the focus is on the implementation of the diesel subsidy to ensure that it achieves its objectives.
Att the same time, the government will work ro reduce leakages in the distribution of diesel subsidies.
"If the rationalisation of subsidies on RON95 petrol is implemented in the future, the government will take appropriate measures to ensure that those who are affected are given appropriate assistance," he said in a written parliamentary reply to Radzi Jidin (Putrajaya-PN).
The blanket diesel subsidy was cut on June 10, resulting in the price of the fuel rising from RM2.15 to RM3.35 per litre.
Rafizi said fuel subsidies accounted for 12.3% of the government's operating expenditure in 2023.
"Savings from the subsidy retargeting initiative will be returned to the people through the implementation of programmes and projects that are more beneficial and needed by the people, such as improvements in the provision of social services and public facilities, including health, education, transport, and security," he said.
In another written reply to Datuk Mohd Shahar Abdullah (Paya Besar-BN), he said the realignment of fuel subsidies is expected to have an impact on inflation.
Rafizi said a well-designed strategy and targeted cash assistance will help reduce the impact on the people.
The old price of diesel is maintained for 23 types of logistics vehicles while land public transport vehicles, including school buses, express buses, ambulances, and fire engines pay a special price of RM1.88 per litre. Fishermen pay RM1.65 for per litre of diesel.
Eligible Malaysians may apply for the Budi Madani diesel subsidy.
"Bank Negara Malaysia in the publication of the 2023 Economic and Monetary Outlook expects the subsidy rationalisation to have short-term implications for the country's inflation rate.
"The inflation rate for 2024 is projected to be between two and 3.5%. This situation is partly due to the gradual shift towards a targeted subsidy mechanism, especially involving fuel subsidies," he said. – June 26, 2024
