lucky time ‘Choppy waters ahead’ for petrol subsidy cut but Malaysia will factor in not just household income: Minister
SINGAPORE: The Malaysia government’s “once-in-a-generation” plan to roll back petrol subsidies from the middle of next year is crucial for fiscal reform but expected to cause significant public backlashlucky time, said its economy minister.
“We are prepared for the choppy waters ahead,” Mr Rafizi Ramli said in an interview with Bloomberg TV released on Monday (Oct 21).
“Obviously there will be people affected and there'll be people unhappy with it and people have to adjust their consumption, so I do expect a lot of noise in the beginning,” he said.
“But my hope and our responsibility in the government is to make sure that we manage this properly so that it is sustainable,” he said of the “once-in-a-generation decision that affects everyone's life”.
Subsidies for the country’s most widely-used RON95 fuel will be cut for Malaysia’s top 15 per cent income group, Prime Minister Anwar Ibrahim announced in his Budget speech last Friday.
Related:
Petrol subsidy cuts for top 15% of income earners, increased minimum wage as Malaysia unveils record US$97.8 billion Budget The government currently spends RM20 billion (US$4.63 billion) a year on blanket subsidies for RON95 petrol, which unfairly benefit the top 15 per cent of earners, as well as foreigners, in Malaysia, he said. The sale of RON95 petrol is reserved for all Malaysian-registered vehicles.
The subsidy cut will save the government RM8 billion, and savings will be used for programmes aimed at improving the welfare and livelihoods of Malaysians, he said.
The top 15 per cent of households are those earning a monthly income of around RM13,000 (US$3lucky time,022) or more. The amount varies depending on the state in which they reside.
A customer at a petrol station fuelling up on RON95 petrol in Kuala Lumpur. (Photo: CNA/Fadza Ishak)
