KUALA LUMPUR – A former top civil servant has called on the government to rethink its decision to provide up to RM8 billion in fuel and cooking oil subsidies this year, saying this will only lead to smuggling of commodities to some neighbouring countries.
Tan Sri Mohd Sheriff Kassim, a former Finance Ministry secretary-general, said if the retail prices of fuel and cooking oil in southern Thailand, Indonesia's Sumatra province, and the Philippine islands off Sabah follow market trends, then the subsidised Malaysian fuel and cooking oil would be cheaper.
“If the price differences are big, this will become an opportunity to smuggle the products out and make a quick profit from cross-border trade by land and sea,” he said in a statement.
There had been rampant smuggling of diesel to southern Thailand due to such subsidies, he said.
Sheriff pointed out that the disadvantage of a price subsidy was that the high-income group would benefit from it as well.
He said that targeted income subsidies as done previously would be better than price subsidies so that only the poor would benefit.
“The best way to help the poor is to subsidise their income without wasting government funds,” he said.
Sheriff said the government should come out with a bigger income subsidy plan for poorer people, including petty traders who have lost their incomes due to measures to contain the Covid-19 pandemic.
Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz said yesterday the higher subsidies this year were due to the increase in global market prices.
He said the government would continue to subsidise fuel and cooking oil prices to help reduce the impact of rising commodity prices on the cost of living. – Bernama, June 13, 2021
