The government is currently still evaluating the need to rationalise the RON95 petrol subsidy, according to Minister of Economic Affairs, Rafizi Ramli. Despite this, the minister ensured that the government’s focus and priority will still be given to the implementation of the ongoing targeted diesel subsidy until it becomes stable and achieves the set objectives.
This evaluation towards the RON95 fuel subsidy rationalisation is to strengthen the sustainability of the country’s fiscal revenue and reduce any “leakage” in the distribution of the diesel subsidy. This is to help exert influence towards the country’s inflation rate.
Rafizi said in a written response in the State Assembly meeting yesterday, “Suppose the subsidy rationalisation towards RON95 petrol is implemented soon, the government will take appropriate measures to ensure that the affected groups will be given the appropriate aid.”
“The savings obtained from the revised targetted subsidy will be reinstated back to the people through the implementation of programmes and projects that benefit more towards the people’s actual needs, including enhancement in the preparation of social services and public facilities, education, transportation, and safety,” he added.
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Rafizi also ensures that in the case of a sudden surge in fuel prices, the government through the Ministry of Finance, Bank Negara, and Ministry of Economy will conduct another evaluation according to current needs.
“This is done to ensure that the people, especially the low-income earners will not be burdened due to any changes in prices,” he said.
Currently, the diesel subsidy is given out via two mechanisms. The first of which is SKDS 2.0, which is designed for companies. Under the SKDS 2.0 mechanism, diesel is sold to 23 types of logistic vehicles at the price of RM2.15/litre, while land public transports such as school busses, express busses, ambulances, and fire engines (bomba) can purchase diesel at RM1.65/litre. As for fishermen, and agriculture smallholders, diesel is retailed at RM1.65/litre under the BUDI Madani programme via monthly aids worth RM200.
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