KUALA LUMPUR: A targeted subsidy mechanism for fuel is currently being tested by the government before its implementation, says Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
However, he said no specific timeline had been set for the rollout as it was subject to a decision by the Cabinet.
“The decision on this will only take place when we are comfortable with the mechanism or the platform to execute it.
“For the time being, the discussion continues on the targeted subsidy but, more importantly, we need to ensure the right mechanism.
“So I cannot commit to the timeline because we need to go back to the Cabinet and present it.
“We’re looking at various platforms because obviously, the customer experience will be very different between rural areas and those in the city,” he said after launching the telco infrastructure services company edotco Group’s sustainability blueprint and report titled “Sustainable and Equitable Access for All” here yesterday.
Last month, Tengku Zafrul assured consumers that the withdrawal of subsidies for petrol would not happen anytime soon.
Mean machine: Tengku Zafrul (left) looking at a drone after the launch of edotco’s sustainability blueprint and report. With him are (from right) MCMC interim chairman Tan Sri Mohamad Salem Fateh Din, edotco Group CEO Mohamed Adlan Ahmad Tajuddin and Axiata chairman Tan Sri Shahril Ridha Ridzuan. — MUHAMAD SHAHRIL ROSLI/The Star
He said the government still had sufficient funds to continue providing the subsidy despite rising global crude oil prices.
The amount of subsidies for this year is expected to reach RM77.7bil, with the fuel subsidy alone set to reach RM30bil.
In June, the fuel subsidy already reached RM5bil a month, according to Tengku Zafrul.
On Bank Negara’s monetary policy committee’s decision to raise the overnight policy rate (OPR) to 2.25%, he said it was controlled by the central bank while fiscal policies were under the government’s purview.
As such, both should act independently, and it was also important to trust the dynamics of the market, Tengku Zafrul added.
“We cannot coordinate by law. It is also important when it comes to trust in the markets, if there is any manipulation or interference by the government in any compound monetary policy decision, that would undermine the integrity of the markets as well.
“We will continue to monitor this. We have seen a strong first quarter gross domestic product (GDP) growth for this year at 5%. As such, the government is optimistic this will continue in the second quarter of 2022,” he said.
He also said the government had seen higher retail impulsive spending in the second quarter of this year than in the first quarter.
Customer spending, he added, was also going up, and this would help the economy to a certain extent.
