The Prime Minister says the lower income group will be compensated by BR1M
PUTRAJAYA: Prime Minister Najib Tun Razak today announced a 20 sen increase for RON95 and diesel effective midnight tonight.
This is one of the measures to rationalise subsidies by the government, Najib, who is also Finance Minister, told a press conference here today.
Currently the government subsidises 83 sen a litre for the RON95 and RM1 a litre for diesel, said Najib.
The government had allocated RM24.8 billion to subsidise for petrol and diesel this year.
The 20 sen subsidy reduction would result in the government still subsidising 63 sen for the RON95 and 80 sen for diesel per litre respectively.
To reduce the burden of this hike on the lower income group the government, the Prime Minister said, will increase the BR1M payments in the 2014 Budget to be tabled next month in Parliament.
He further explained that the increase in petrol price is a process to strengthen the economy in the short and medium term, which ultimately is aimed at giving positive impact to the well-being of the rakyat.
Najib said if the nation’s economy was affected, it would bring adverse effects on the rakyat, like the situation in some foreign countries which have been badly affected when they failed to manage
their economy properly.
He said the government’s commitment to implement fiscal consolidation would be continued to achieve the fiscal deficit target of around three per cent of gross domestic product in 2015 and balanced budget by 2020.
“We must understand this is not a question of politics, but about the
country’s future, if the economy is affected it will bring about adverse effects on the rakyat,” he said.
To a question, Najib said the subsidy rationalisation process was a part of the government’s policy that was finalised, however, the government was determined to implement it in stages to ensure its impact would not burden the rakyat.
“We want to be certain that the impact, seen as a burden to the rakyat, we ensure that it’s at the minimum and we will enlarge the social security net, like I said earlier, including increasing the rate for Bantuan Rakyat 1Malaysia (BR1M) payment,” he said.
Najib said the increase in petrol price would give minimal impact and he
hoped the business community does not take the advantage to hike their product prices without considering the interest of the rakyat