‘No choice’: Targeted diesel subsidies needed to save Malaysia, says PM Anwar

'No choice': Targeted diesel subsidies needed to save Malaysia, says PM Anwar

PUTRAJAYA: The&nbsp, Malaysian government’s decision to&nbsp, implement targeted diesel subsidies&nbsp, is necessary to save the country, Prime Minister Anwar Ibrahim said on Monday ( Jun 10 ).

Action must be taken, even though the estimate is unhappy, Anwar said during a regular council with workers from the&nbsp, Prime Minister’s Department.

Malaysia has started a more focused approach that focuses primarily on the poor by switching from expensive cover subsidies. &nbsp,

The nation, which subsidizes the price of corn, cooking oil, and other basic commodities in large amounts, has seen its rebate expenses rise to record levels in recent years as a result of rising commodity prices and stretched government finances.

Its fuel subsidy costs only has risen 10- slide from RM1.4 billion in 2019 to RM14.3 billion in 2023.

” Who wants this targeted payment? We must also be aware that whatever we do, we will face severe repercussions from all kinds of lies and libel,” said Anwar, who is also the financing minister.

” In truth, we have stated that prior to this, all prime ministers had endorsed the precise rebate, but because of the risks involved, there was no political will to put it into practice.” However, to save the state, we have no choice” .&nbsp,

On Sunday, Malaysia announced that the price of diesel in Peninsular Malaysia would increase by over 50 per cent to&nbsp, RM3.35 ( US$ 0.71 ) per litre. This took impact on Monday.

This is the unsubsidised business price&nbsp, based on the May 2024 regular according to the Automatic Pricing Mechanism method, said the country’s next finance secretary, Amir Hamzah Azizan. &nbsp,

” We are doing this because the leakages ( of subsidised diesel ) across our borders is huge”, he added. &nbsp,

Diesel likely be at RM2.15 per gallon in Sabah and Sarawak. &nbsp,

Diesel for reduced- money groups, including fishermen and farmers, as well as for the usage of school buses and ambulances, will continue to be subsidised, said Amir Hamzah, adding that the new strategy would certainly lead to an “escalation of prices”.

Cutting fuel subsidies is expected to save the authorities about RM4 billion annually&nbsp, and this move may improve the country’s economic status in the long term, he added. &nbsp,

According to analyst Oh Ei Sun of the Malaysian Pacific Research Center,” this government must take such an unpopular measure right away.”

Malaysia is expected to spend RM52.8 billion on subsidies and social assistance this year, down from about RM64.2 billion in 2023, based on its 2024 budget.