KUALA LUMPUR: The government will maintain targeted fuel subsidies instead of allowing prices to follow market rates for all consumers, says Finance Minister II Datuk Seri Amir Hamzah Azizan.
Amir Hamzah said the government remained committed to targeted subsidies despite uncertainty over whether the conflict in West Asia would ease and global oil prices would stabilise next year.
"As we know, there have been proposals from economists, including the International Monetary Fund (IMF) and local experts, for fuel and electricity prices to be set according to market rates for everyone, with cash assistance provided only to the poor.
"The Madani government disagrees with this approach. We remain committed to continuing targeted subsidies to protect the people from rising global prices, while curbing leakages caused by smuggling and preventing non-citizens from benefiting from these subsidies," he said.
He was speaking during the Finance Ministry's winding-up session at the committee stage of Budget 2027 in the Dewan Rakyat on Tuesday (Nov 3).
Amir Hamzah said the government was prepared for all eventualities and would do everything possible to ensure that the people remained protected.
"Through Budi Madani, Malaysians continue to enjoy subsidised RON95 of up to 300 litres at RM1.99 per litre, compared with the actual price of RM4.42 per litre.
"Meanwhile, subsidised diesel of up to 400 litres is available at RM2.10 per litre, compared with the actual price of RM5.27 per litre.
"Therefore, the nearly RM40bil commitment is necessary to protect the people. Thankfully, we have implemented targeted subsidies over the past two years, giving us the fiscal space to withstand this energy crisis," he said.
On rural road projects in Sabah and Sarawak, Amir Hamzah dismissed claims that projects or Letters of Acceptance (SSTs) had been cancelled.
He said the Madani government had never neglected rural road development, with actual expenditure and allocations during the current administration amounting to RM11bil, more than three times the RM3.72bil recorded in the preceding five years.
"Spending this year alone has reached RM3bil, exceeding the total expenditure on rural roads over the five-year period from 2017 to 2021.
"In reality, the management of the Rural and Regional Development Ministry and the Finance Ministry had taken steps to defer tenders and the issuance of new SSTs.
"No SSTs had been issued for projects that were subsequently cancelled," he said.
He added that all projects on the list approved by the Economy Ministry remained scheduled for implementation.
"However, to address overcommitments and settle outstanding payments to contractors, project implementation schedules need to be reviewed, controlled and managed more effectively in accordance with available allocations," he said.
