Fuel subsidies to stay for now

KUALA LUMPUR: The much-hyped about withdrawal of subsidies for petrol is not going to happen any time soon.

The government still has sufficient funds to continue providing the subsidy despite rising global crude oil prices.

Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the government still had enough money and would continue to support the people in terms of protecting their livelihoods, especially that of the vulnerable groups.

“Our inflation target (this year) is still within what we have said before – between 2.3% and 3.3%,” he told reporters after the launch of the “Khazanah Sustainability Framework & Targets: Investing in a Sustainable Transition 2022” here yesterday, according to Bernama.

In recent days, there have been talk about the withdrawal of the fuel subsidy and the implementation of targeted subsidies, which would see only the deserving getting petrol at subsidised prices.

There have also been suggestions of a tiered subsidy as the government could not bear the cost.

International Trade and Industry Minister Datuk Seri Azmin Ali, in pushing for a targeted fuel subsidy system, said a BMW owner should not get the same subsidy as someone with a Kancil.

Tengku Zafrul, however, said yesterday that the government would continue to monitor the global oil prices to draw up a long-term plan, with one of the measures being to implement a targeted subsidy.

“As the government has said before, the subsidies for this year will reach RM70bil, meaning that the fuel subsidy will reach RM30bil. We have made a projection based on Brent oil price. Last month (May), it (fuel subsidy) already reached RM5bil a month.

“However, at this moment the government will continue to allocate for the subsidy. We are still able to help the people through the subsidy, so we will continue,” he said.

Meanwhile, he said the government had no intention yet of asking Petronas for an additional dividend to bear the cost of the subsidy.

“We will see all (options). The government revenue is increasing as our revenue depends on commodity prices. Companies like Petronas have also announced strong financial positions (but) whether we will ask for more dividend from them or anything, has not yet been discussed.

“The government’s revenue has also increased although the increase is not as high as the (increase in) subsidy. We will continue to monitor as this is not only a phenomenon in Malaysia but also at the global level,” he added.