Fuel subsidy mechanism to be introduced early next year

RAM Ratings said the decision to float the price of RON95 based on the Automatic Price Mechanism will lift headline inflation by 0.9 percentage points in 2019.

KUALA LUMPUR: The government is expected to announce a new mechanism for fuel subsidy early next year while ensuring that it would not require a huge allocation for the purpose.

Deputy Finance Minister Datuk Amiruddin Hamzah said the government would also ensure that the implementation of the targeted fuel subsidy system would be smooth.

“We are working hard towards it and we hope that we can make the announcement early next year. The sooner we get it finalised, the sooner we can get it launched,” he told reporters after officiating ‘The Digital Economy: Unlocking its Full Potential to Drive Malaysia's Development' forum organised by the ministry and the World Bank Group's Global Knowledge and Research here, today.

Earlier, responding to a question from Senator Ng Chiang Chin at the Dewan Negara, Amiruddin said the government had spent RM1.667 billion to subsidise the RON95 and diesel fuel from May to July.

He said at the moment, the government still maintained the retail prices of RON95 petrol and diesel at RM2.20 and RM2.18 per litre, respectively, despite the higher market prices.

Amiruddin added that through the targeted fuel subsidy mechanism, fuel subsidies would be given according to an appropriate rate each month, as well as in accordance with a quota system for the bottom 40 per cent household income group (B40).

“The subsidies will be given to those who use 125cc motorcycles and below and 1,300cc cars and below,” he added. - Bernama