Rafizi: Malaysia Will Proceed With Cutting Down RON95 Subsidies This Year

The govt. will reportedly continue plans to reduce RON95 petrol subsidies this year and reduce its fiscal debt.

Economy Minister Rafizi Ramli reportedly confirmed that the Malaysian government will continue its plans to reduce RON95 petrol subsidies this year. This is aimed primarily at reducing its fiscal deficit.

“We are sticking to it,” insists Rafizi when interviewed by press in Putrajaya yesterday. He also added that the government must “manage the sequence” of reduction in light of the possibility of rising inflation even before such subsidy reductions take effect.

Rafizi, who is also Pandan MP, further notes the government’s intent at phasing out the blanket subsidy for RON95 fuel. Said fuel type is widely the used economical fuel variant, and constitutes the majority of the government’s reported RM81 billion expenditure on subsidies last year.

RON95 petrol subsidies reportedly costed the Malaysian government up to RM81 billion last year.

“To reach the fiscal target of 4.3% , a certain timeline has to be abided. Otherwise, the dollars and cents will be off,” Rafizi continued. He also reiterates that the current model allows top 20% (T20) households to become 53% of the recipients, thus rendering the scheme unsustainable.

As a refresher, Rafizi had previously mooted plans for tailored or targeted RON95 subsidies to be practiced in the second half of this year. Said method is thought to be enabled through the implementation of PADU, which experts tip will save up to RM6 billion for the government.

Source: The Malay Mail