KUALA LUMPUR – A staggering 35% of subsidies for petrol, diesel, and liquified petroleum gas (LPG) last year were enjoyed by individuals in the T20 income bracket, the Dewan Rakyat heard today.
Deputy Finance Minister Datuk Seri Ahmad Maslan (Pontian-BN) said this made up RM17.8 billion of the overall RM50.8 billion in subsidies allocated by the government for this purpose.
Astonishingly, the figure is even higher than the subsidy for B40 individuals.
According to Ahmad, only 24% of the government subsidy for petrol, diesel, and LPG were utilised by those in the lower income bracket.
The remaining 41% were enjoyed by the M40 group, he added.
Ahmad said this is why the government is planning to implement a targeted version of the subsidy moving forward, as savings from this can be used for other more meaningful purposes.
“If we stop subsidising these to the T20, we can save about RM15 to RM17 billion,” he said in the Dewan Rakyat today.
“You (MPs) can imagine how many other initiatives we can implement to help the rakyat and in the management of 26 ministries.”
Ahmad was responding to Datuk Ahmad Amzad Mohamed (Kuala Terengganu-PN) on whether the government intends to introduce targeted subsidies for petrol, among others.
Earlier, the deputy minister revealed that in total, the government had spent RM66.3 billion last year in consumption-based subsidies with the others including the likes of cooking oil, chicken and eggs, and electricity tariff.
Ahmad said while the issuance of subsidies have helped reduce the impact of the rising cost of living, its implementation has also led to leakages.
One example is the smuggling of diesel, he said, noting that the vast difference in market value and the subsidised price of the good makes it highly sought-after.
He added that the government is currently reviewing the feasibility of implementing targeted subsidies as well as identifying its mechanism.
“Its implementation will still benefit a huge portion of Malaysians, without any major implications to the cost of living.” – The Vibes, February 28, 2023
