Rafizi: RON 95 Price Increment Would Be Sudden; Ong: This Would Provoke Public Backlash

Former Deputy Minister Ong Kian Ming has spoken out and criticised Minister of Economy Rafizi Ramli's statement that the government will not provide advance notice on decisions to remove blanket subsidies for RON95 petrol and replicate how the diesel subsidy removal was announced citing this would likely provoke public backlash.

According to MalaysiaKini, Ong highlighted that the diesel subsidy rationalisation implemented in June was not a complete surprise since it had been announced by the PM in the 2023 budget. However, the sudden implementation and lack of awareness among affected groups, including those eligible for targeted assistance but unaware of their eligibility, particularly in the logistics sector, led to dissatisfaction.

Ong warned that a similar approach to petrol subsidy rationalisation would face even greater public opposition as it involves a larger user segment. He was also quick to point out the unresolved issues under Rafizi’s ministry surrounding the use of the PADU database.

The ministry had developed and pushed the PADU database as the tool that would facilitate targeted diesel subsidy programmes. However, to date there has not been any mention of this database raising the question on why it wasn’t utilised and noting the lack of public communication on how it would be employed for petrol subsidies.

Ong who is also a member of the Pakatan Harapan also raised concerns about mixed messaging from the coalition government. Prime Minister Anwar Ibrahim had to clarify Rafizi's comments, stating that no decision had been made regarding the petrol subsidy rationalisation programme.

Ong argued that this lack of coordination between the Prime Minister and the Economy Minister undermines confidence in the government's ability to execute a systematic and well-thought-out subsidy rationalisation plan.

Earlier last month, Maybank Investment Bank had predicted that the government could either raise the RON95 price  by 32 cents per litre (+15.6%) starting July 1, 2024, or RM0.65 per litre (+31.7%) on Oct 1, 2024. Either increments will enable the government to save an additional RM4.1 billion it requires as part of the overall 2024 Budget’s target of reducing subsidy expenditures by RM11.5 billion.