Another day, another statement on fuel subsidies. This time, it’s from the minister with the unenviable task of managing both viability and assistance. Finance minister Tengku Datuk Seri Zafrul Abdul Aziz says that the government still has sufficient money to continue to provide fuel subsidy despite rising global crude oil prices.
“Our inflation target (this year) is still within what we have said before — between 2.3% and 3.3%. As what the government has said before, the amount of the subsidies for this year will reach RM70 billion, meaning the fuel subsidy will reach RM30 billion. We have made a projection based on Brent oil price. Last month (May), it (fuel subsidy) already reached RM5 billion a month.
“However, at this moment the government will continue to allocate for the subsidy. We are still able to help the people through the subsidy, so we will continue,” he told the media last Friday, reported by Bernama.
However, the senator said that the government’s long-term plan is to implement a targeted subsidy system. That is where only those deemed to be deserving of assistance will get fuel subsidy, as opposed to the current blanket subsidy for all Malaysians. Zafrul previously said that for every RM1 of fuel subsidy in the current system, 53 cents go to the T20, while 15 cents benefit the B40.
When it comes to rising crude prices, which adds to the fuel subsidy bill, many point out that Malaysia is an oil producing country and indeed, Petronas records higher revenue, but it’s not as high as subsidy bill.
“We will see all (options). From the government revenue, Alhamdulillah, it is increasing as our revenue also depends on commodity prices. Companies like Petronas have also announced their strong financial position (but) whether we will ask for more dividends from Petronas or anything, it has not yet been discussed.
“The government’s revenue has also increased although the increase is not as high as the (increase in) subsidies. We will continue to monitor as this is not only a phenomenon in Malaysia but also at the global level,” Zafrul said.
Speaking of the global level, Malaysians are relatively shielded from inflation as energy costs are low here, with fuel and electricity subsidised by the government. Some essential items have ceiling prices, too. Despite this, ‘cost of living’ has dominated headlines and coffee shop talk of late. Imagine when subsidies are gradually rolled back for the non B40s – will it affect you?
Perhaps we can brace ourselves for higher energy costs by being less wasteful. Keeping the car idle to enjoy the air con for a takeaway that might take 20 minutes, having the home AC on the whole day, ordering more food than you can eat; you know, things like that. It all adds up.
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