Anwar – RON95 Subsidy Rationalisation Not Discussed, Focus Is On Diesel

Prime Minister Datuk Seri Anwar Ibrahim has confirmed that the rationalisation of the RON95 fuel subsidy is currently not being considered.

Anwar also stressed that before any potential changes to RON95 subsidies are made, the government's present priority is to make sure the public properly understands the implementation of targeted diesel subsidies.

Anwar, who is also the First Finance Minister, emphasised the significance of rationalising fuel subsidies in order to strike a balance between the need to reduce the national debt and the need for higher government revenue.

He listed a number of ways to increase revenue, such as careful spending and borrowing money solely for absolutely necessary development projects. "Rationalisation of subsidies is a comprehensive effort covering a broader spectrum to help reduce the government’s yearly borrowings," Anwar said.

Improved taxation and more effective law enforcement are two other strategies. "If we don’t do it, our revenue will not increase, but our debt will continue to rise," he explained.

Previously Maybank Investment Bank’s simulation indicated that the government could potentially raise the RON95 price by 32 cents per litre (+15.6%) starting July 1, 2024, or by 65 cents per litre (+31.7%) on October 1, 2024. Either scenario would enable the government to save an additional RM4.1 billion, contributing to the overall 2024 Budget’s goal of reducing subsidy expenditures by RM11.5 billion.

Source: The Star