Up to RM17bil in savings if T20 not given fuel subsidy

THE government stands to save up to RM17bil in its coffers if the T20 group is exempted from enjoying fuel subsidies, says Deputy Finance Minister Datuk Seri Ahmad Maslan.

According to him, this is because Putrajaya had spent RM50.8bil in subsidies for petrol, diesel and liquefied petroleum gas (LPG) last year, and it was estimated that the T20 group received about 35% or RM17.8bil of the subsidies spent, while the M40 group took 41%, with the B40 group taking 24%.

“If we don’t want the T20 to receive subsidies for petrol, LPG and diesel, the government can save between RM15bil and RM17bil.

“You can imagine how the RM15bil to RM17bil can be used to assist Malaysians through programmes from all 26 ministries,” said Ahmad during Question Time.

He was responding to a supplementary question by Datuk Ahmad Amzad Hashim (PN-Kuala Terengganu), who asked about measures to address the plight of families who slipped from the M40 to B40 status.

Earlier, Ahmad told the House that last year, a total of RM66.3bil was spent for various forms of subsidies in petrol, diesel, LPG, cooking oil, electricity bills, as well as chicken and eggs, which he argued had successfully reduced the cost of living.

“But, its implementation that is not targeted has led to leakages,” he added.

Ahmad said that under the RM66.3bil figure, about RM2.4bil was spent for subsidising cooking oil, RM9.8bil for electricity, RM1.8bil for chicken and eggs, other forms of subsidy for Sabah amounting to RM1.5bil, and the remaining RM50.8bil was for fuel.

Meanwhile, he said diesel subsidies rose to RM8.4bil this year, compared to RM5.8bil in 2018, and RM6.1bil in 2019.

“Was it due to actual consumption or smuggling?

“Because of that, we estimate that diesel is being smuggled through various methods. The same goes with RON95 petrol.

“We will monitor illegal smuggling through various government agencies,” Ahmad said.

There have been several proposals for the government to implement a targeted subsidy mechanism to ensure that only those in the B40 and M40 groups are benefiting.