KUALA LUMPUR – The Finance Ministry (MoF) is conducting a study to implement a targeted petrol subsidy to reduce the present cost of subsidies that is presently borne by the government.
Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz said the government currently has to bear subsidies for petrol, diesel, and liquefied petroleum gas in the excess of RM2 billion a month due to the increase in world oil prices of US$100 (RM418) a barrel.
“If the world oil price remains at US$100 a barrel, the total government subsidy for 2022 is expected to reach RM28 billion compared to only RM11 billion in 2021.
“Therefore, the government will review the oil subsidy mechanism so that it can be implemented in a more targeted manner, and focus on efforts to help the needy,” he told the Dewan Rakyat today.
Tengku Zafrul said this in response to a question from Wong Hon Wai (Bukit Bendera-PH) who wanted the government to state whether a coordination of petrol, diesel, and LPG subsidy programmes should be made due to the global increase in crude oil prices.
Zafrul said the people currently only pay RM2.05 per litre for RON95 petrol, compared to the actual cost of RM3.70 per litre.
He said Malaysians also enjoyed the lowest petrol prices compared to oil-producing nations and other neighbouring countries.
“For example, the price of petrol in Saudi Arabia is RM2.59 per litre, RM3.74 in Indonesia, RM5.63 in Thailand, and RM9.16 in Singapore.
“The government also cannot borrow to finance operating expenses such as subsidy costs.
“It needs to be balanced with increased revenue and cost savings”.
In 2019, the then Pakatan Harapan (PH) government announced the implementation of the Petrol Subsidy Programme (PSP) with an allocation of RM2.4 billion during the 2020 Budget, effective November 2019.
The program is targeted at eight million users from the B40 and M40 group.
In December 2019, the cabinet at the time decided to postpone the implementation of the PSP until a date to be announced later.
It was however cancelled in July 2020, with the decision announced by the then-deputy domestic trade and consumer affairs minister Datuk Rosol Wahid. – The Vibes, March 10, 2022
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