Govt sticking with plan to cut fuel subsidies this year, says Rafizi

PETALING JAYA: Fuel subsidies will be cut this year to reduce the national fiscal deficit, says Rafizi Ramli.

The Economy Minister said that the government was sticking to the plan in an interview with Bloomberg on Tuesday (April 16) in Putrajaya.

He said this was needed to “manage the sequence” of subsidy cuts, as the risk of inflation loomed before the cuts were implemented.

Since last year, Rafizi has spoken about the targeted RON95 subsidy programme in the second half of 2024 to optimise its resources for those who need it the most.

He had said that those in the top 20 (T20) income group are receiving 53% of blanket fuel subsidies.

Moreover, the blanket subsidies on RON95 fuel have taken up most of the total RM81bil in subsidies handed out in 2023.

During the interview, he said that the government plans to narrow its budget deficit to 4.3% of gross domestic product this year, up from 5% in 2023.

“In order to reach the fiscal target of 4.3%, a certain timeline has to be followed,” the Pandan MP said.

On Tuesday (April 17), the ringgit slid to RM4.78 against the US dollar, nearing its record low of RM4.8850 in 1997, following the fallout from the Asian financial crisis.

However, Rafizi is not too concerned about the slide, as it has not damped interest from foreign investors or hindered the government’s ambitions.

“As far as the Economy Ministry is concerned, we do not see ringgit fluctuations beginning to have a negative impact on our long-term restructuring,” Rafizi said.

He also highlighted that creating one of the world’s “top startup ecosystems” in Malaysia is key to the government’s efforts.

“Malaysia should be much better as a vibrant scene for startups, for technology and digital sectors, given all our inherent advantages,” Rafizi said.

Meanwhile, Khazanah Nasional Bhd will create a "super fund" along with other sovereign funds to invest in startups, which the government hopes will attract venture capital firms to the country.