The government says it is set to introduce a targeted subsidy mechanism for RON 95 petrol in the second half of 2024. According to economy minister Rafizi Ramli, the timeframe will allow authorities to ensure the subsidy is delivered in a targeted manner to “those who need it most,” as FMT reports.
“Sidestepping issues of duplication enables the government to take a decisive step away from previous administrations,” he said at the national economic outlook conference held at the Tun Razak Exchange (TRX) earlier today.
Introducing the subsidy will also allow Putrajaya to optimise its resources. Rafizi said the government needs to find new ways to better manage its resources while reducing leakages and wastage, and the targeted RON 95 petrol subsidy is in line with this effort.
“A country where the T20 group is receiving 53% of blanket fuel subsidies is not a sustainable model, nor is it an equitable one,” he explained. “One inescapable dimension of this is addressing our revenue inadequacy by increasing our tax collection. Spending more money than we have is never conducive to a dynamic, sustainable state,” he added.
Rafizi reiterated that the Pangkalan Data Utama (PADU) socio-economic database would be a crucial component in allowing the government to rationalise its subsidies and implement social welfare reforms. As of late October, the PADU database was 72% complete, with a total of 29.8 million cross-ministerial and agency data having been collated.
Petrol is of course not the only fuel which will hava a targeted subsidy mechanism. Diesel will be too, and in phases, as announced by prime minister Datuk Seri Anwar Ibrahim during Budget 2024. According to the PM, subsidised diesel prices will continue to be enjoyed by selected users such as goods transport and logistics companies, while other users will be charged a higher price.
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