KUCHING: If the Middle East conflict persists in the coming months, the cost of maintaining subsidised RON95 petrol at RM1.99 per litre could spiral to RM24bil, says Datuk Seri Anwar Ibrahim.
The Prime Minister said this was based on calculations that petrol subsidies alone cost the government RM2bil a month.
“That is why we must pray for a swift end to this so that we won’t be burdened,” he said in his speech at a Sarawak government breaking of fast event yesterday.
Anwar said subsidies for RON95 and diesel will add up to RM3.2bil monthly, however the Cabinet decided to maintain the Budi95 subsidy programme.
“We will try to find other ways through savings and responsible fiscal management in other sectors.”
Anwar said the government does not want to burden the rakyat with higher fuel prices as it could lead to a cascading effect on the cost of living.
The Prime Minister also 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 smuggling of diesel.
“Diesel prices in Sabah and Sarawak are low. This might cause smuggling activities to increase.”
Anwar also spoke on the situation in Iran and the many innocent lives lost because of the joint attacks by the United States and Israel.
As a result, Anwar said Iran closed off the Strait of Hormuz, stranding hundreds of vessels at the narrow waterway, causing crude oil prices to skyrocket to over US$100 (RM394).
The Prime Minister said the government had to come up with key policies to mitigate the global economic effects of the conflict.
Among the steps taken, said Anwar, was to ensure regular Cabinet meetings every Wednesday, as well as a special Cabinet meeting to monitor global developments.
Anwar also said the special Cabinet meeting yesterday approved an allocation of RM150mil to repair the Sarawak River Barrage.
“I was informed by Abang Johari that there are some projects at the approval stage.
“Water and electricity supplies are important matters. Don’t give excuses for delays,” he said, adding that Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi would be instructed to find a way to resolve the situation.
Earlier, Finance Minister II Datuk Seri Amir Hamzah Azizan said petrol subsidies alone are estimated to reach about RM2bil while diesel has increased to about RM1.2bil.
This brings the total fuel subsidy for RON95 and diesel to RM3.2bil, an overall increase of RM2.5bil compared with the RM700mil before the conflict.
