PM: Targeted Fuel Subsidy Will Weed Out T20, Foreigners With RM4 Billion Yearly Savings

Prime Minister Datuk Seri Anwar Ibrahim stated today that the Cabinet has approved the deployment of targeted fuel subsidies, beginning with diesel. This program is expected to save the country RM4 billion annually.

In his announcement he said that the targeted diesel subsidies will be limited to Peninsular Malaysia, excluding Sabah and Sarawak. He stated that the subsidy rationalisation will not benefit the "Maha Kaya" T20 income bracket or foreigners.

To avoid dramatic price hikes in goods and services, the government will continue to grant diesel subsidies to merchants who use diesel-powered commercial vehicles. Ten types of public transportation vehicles, fishermen, and 23 types of goods transport vehicles regulated by the Subsidised Diesel Control System (SKDS), such as buses and taxis, are all included.

Anwar emphasised the government's commitment in taking care of the people's well-being in the face of rising living costs. He stated that qualifying diesel vehicle owners, including small farmers, rice producers, and small traders, would receive cash assistance, but specifically excluded the T20 category from these benefits.

Meanwhile, economist Dr. Geoffrey Williams stressed the importance of carrying out the subsidy rationalisation process in order to save money and better target aid, but cautioned that this process must be carried out in a fair and sensible manner.

Dr. Williams suggested that the government reform the tax system by implementing an e-payments tax to replace the Sales and Service Tax (SST), which might help increase disposable income.