Bulk Of Fuel Subsidy Been Enjoyed By High-income Group, Non-Citizens - Zahid Hamidi

The government's introduction of fuel subsidies has unquestionably contributed to price stabilization, uninterrupted supply, and a reduction in the cost of living for the general public
However, according to Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, the majority of it has gone to the wealthy and non-citizens.
As a result, it is unjustifiable for the government to continue with the current approach for petrol and diesel subsidies, which is unfair to the target groups that genuinely need assistance.
Economy Minister Rafizi Ramli announced on Monday that the RON95 fuel subsidy program would begin in the second half of next year, with the goal of better benefiting those who should benefit.

He stated that the current subsidy model, in which those in the top 20 (T20) income group receive 53% of blanket fuel subsidies, is unsustainable.

In response to Rafizi's case, Datuk Seri Ahmad Zahid Hamidi stressed that the T20 group uses up to RM399 worth of RON95 per month on average, while the B40 group only spends RM243 on the subsidized fuel monthly.

"These findings indicate that the bulk subsidy approach does not effectively reach its intended target groups," he said in his speech at the launch of the Symposium on Cost of Living (SCOL 2023).
Zahid went on to say that the diesel subsidy was intended to help fishermen and consumers get "value for money" on the services and goods they bought.
"However, it has been misused by certain parties who take advantage of the subsidised diesel, leading to irregularities and smuggling in the black market.

"Therefore, it is not appropriate for the government to continue with the existing approach that is unfair to the target group that genuinely needs assistance."

Zahid said the government is also burdened with increasing expenditure on subsidies.

"Last year, the total expenditure for subsidies amounted to RM91.9 billion, significantly higher than previous years.

"For this year, the original allocation for subsidies is RM64 billion, but the government projects this value to reach RM80.9 billion based on current spending.

"This ongoing scenario is not fiscally optimal hence it is reasonable for the responsible government to take action to improve targeted assistance delivery methods for the people."

Source: NST