KUCHING: If the Middle East conflict persists, government subsidies to maintain the price of RON95 petrol at RM1.99 per litre could spiral to RM24bil by the end of 2026, says Datuk Seri Anwar Ibrahim.
The Prime Minister said on Friday (March 13) that this was based on calculations that increasing petrol subsidies alone could cost the government RM2bil a month.
Finance Minister II Datuk Seri Amir Hamzah Azizan earlier stated that rising global oil prices amid the Middle East conflict are set to significantly impact government finances, with petrol subsidies alone estimated to jump to about RM2bil (per month) compared to around RM700mil previously.
"If the situation continues until the end of the year, it will cost us RM24bil in subsidies for petrol only.
"That is why we must pray for a swift end to this so that we won't be burdened," said Anwar during his speech at a Sarawak government buka puasa event on Friday (March 13).
Anwar, who is al Finance Minister said subsidies for RON95 petrol and diesel come up to RM3.2bil per month but the Cabinet decided to maintain its Budi95 subsidy program.
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"We will try to find other ways through savings and a more responsible fiscal management in other sectors," he added.
Anwar said this was because the government does not want to burden the people with higher fuel prices as it could lead to a cascading effect on the cost of living.
At the same time, Anwar said he told Sarawak Premier Tan Sri Abang Johari Openg to cooperate with the Domestic Trade and Cost of Living Ministry on efforts to curb diesel smuggling in the state.
Anwar also touched on the situation in the Middle East, where thousands of innocent lives have been lost as a result of joint attacks by Israel and the United States on Iran.
Anwar said Iran had closed off the Strait of Hormuz and hundreds of vessels are stranded, causing crude oil prices to skyrocket to over US$100 as of March 13.
Due to the global uncertainty, Anwar said it is important for the government to come up with policies to mitigate the global economic effects of the Iranian conflict.
Among the steps taken by the government, said Anwar, is to ensure regular Cabinet meetings every Wednesday, as well as a special Cabinet meeting on Friday to monitor global developments.
"We must take necessary steps. Don't wait until disasters are here and only we try to solve it," he added.
Meanwhile, Anwar said the Special Cabinet meeting on Friday approved an allocation of RM150mil to repair the Sarawak River barrage.
