Many may remember Datuk Seri Anwar Ibrahim battle cry back in the 2008 general election – get elected today, petrol prices to drop tomorrow. Now that he is finally the Prime Minister of Malaysia after more than a decade in waiting, you would think that Anwar will finally follow through and deliver on his promise to reduce fuel prices.
Yet, the price for RON95 petrol has remained at RM2.05 for more than two years now – the ceiling price set by the government back in February 2021 for the fuel automatic pricing mechanism (APM) system. So what gives?
In a video published on X, the social media platform formerly known as Twitter, Prime Minister Anwar Ibrahim explains that the economic situation and global fuel prices were completely different between 2008 and the present day.
“When I made that statement, it was 2008. At that time, fuel prices in Saudi Arabia – a country that produces petrol – were 50 sen (per litre), while ours were RM1.80 or RM1.60 […] so of course we had to drop our prices”, Anwar said in the video that was recorded at the recent Majlis Rahmah Mesra Madani event at Universiti Teknologi Petronas (UTP), Perak.
“But in 2023, fuel prices in Saudi Arabia are even higher than that of Malaysia, so how are we supposed to reduce our prices? Subsidies are already skyrocketing,” he adds, claiming that the government is already spending RM30-40 billion in fuel subsidies today. Currently, a litre of RON 95 petrol in Saudi Arabia costs SAR2.33 (approx. RM 2.94).
The government spent RM50.8 billion in fuel subsidies last year, of which some 35% or RM17 billion went to the highest-earning T20 group, while the lowest income group (B40) accounted for only 24%, according to Deputy Finance Minister, Datuk Seri Ahmad Maslan.
In an effort to ensure the subsidies are properly distributed according to needs, the government is currently mulling the introduction of a targeted subsidy system for fuel, based on net household income data gathered by the National Central Database (PADU). The targeted fuel subsidy is expected to be tabled in Parliament on 13 October, ahead of its official introduction next year.
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