Govt currently testing targeted fuel subsidies, says Zafrul

KUALA LUMPUR: The government is currently testing a targeted subsidy mechanism for fuel to be implemented in the country, says Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.

However he said there was no timeline for the implementation as the decision will be made by Cabinet.

"The decision on this will only take place when we are comfortable with the mechanism on the platform to execute it.For the time being the discussion continues on targeted subsidies, but more importantly, we need to ensure the right mechanism,” said Tengku Zafrul.

He added that he could not commit to a timeline as he had to go back to Cabinet to present it.

"We're looking at various platforms because the users are different; as such the customer experience will be very different in rural areas and in the city," he said.

Tengku Zafrul was speaking to reporters after launching telco infrastructure services company edotco Group's sustainability blueprint and report titled Sustainable & Equitable Access for All, here on Thursday (July 7).

The report outlines edotco's pledge to foster connectivity to power sustainable and responsible growth nationwide and regionally.

In an earlier report Tengku Zafrul assured that the withdrawal of subsidies for petrol was not going to happen any time soon.

He said the government still had sufficient funds to continue providing the subsidy despite rising global crude oil prices.

The amount of the subsidies for this year was expected to reach RM77.7bil, with fuel subsidy alone expected to reach RM30bil.

In May, the fuel subsidy had already reached RM5bil a month, Tengku Zafrul said.

On the Bank Negara the monetary policy committee (MPC) of Bank Negara Malaysia decision to raise the overnight policy rate (OPR) to 2.25 per cent, he said it was controlled by the central bank while the fiscal policies are under the government’s purview.

As such both should act independently, and it was also important to trust the dynamic of the market.

"We cannot coordinate by law. It is also important when it comes to the trust in the markets, if there is any manipulation or interference of the government in any compound monetary policy decision that will undermine the integrity of markets as well," he said.