KUALA LUMPUR, June 24: The targeted diesel subsidy rollout could strengthen Malaysia’s fiscal position and help implement reforms for the benefit of the people.
Senator Mohd Hasbie Muda said the government had been spending substantial amounts on subsidies, averaging RM25 billion to RM30 billion annually over the past decade.
“Can the government afford to owe RM70 billion to RM100 billion annually for subsidies? In my opinion, subsidies should only be given to countries with a surplus budget.
“People argue that, as an oil-producing country, we can afford to provide subsidies. However, we must not rely on our resources to justify ongoing subsidies. We should target subsidies to those who genuinely need them,” he said this on the Bernama Radio programme on Monday.
Mohd Hasbie noted that retargeting subsidies would allow the government to allocate funds to more urgent needs, such as the national health sector.
“We spend a large amount on health. To improve healthcare quality, we should increase spending on health and education, enhancing both vital sectors.
“Savings from targeted subsidies will support these efforts,” he added.
Finance Minister II, Datuk Seri Amir Hamzah Azizan, previously mentioned that an estimated RM4 billion in savings from diesel subsidy retargeting is expected to provide the government with greater fiscal flexibility to improve essential services for the people.
Diesel subsidy rationalisation is the government’s third measure to restructure national subsidy distribution, following electricity tariff adjustments that saved RM4.5 billion and the floating of chicken and egg prices that saved RM1.2 billion.
The retail price of diesel at all pumps in Peninsular Malaysia was set at RM3.35 per litre, effective June 10, based on the market price using the Automatic Pricing Mechanism formula. -TVS
