Govt still subsidising fuel prices, says Treasury sec-gen


KUALA LUMPUR: Participants of a post-Budget dialogue were told today that the government was still subsidising the price of fuel although it was supposed to have been abolished in 2014.

Treasury secretary-general Irwan Serigar Abdullah said the subsidies were specifically reserved for periods when fuel prices increased during the weekly price adjustments.

“Although we have implemented the fuel price mechanism, the government is still subsidising fuel prices. We do not want to burden the rakyat too much. There are periods when prices go up, so we subsidise it a bit. A few hundred million ringgit a month.

“I do not know if we will do this indefinitely, but at the moment, we are subsidising the prices, though not much.

“Before the subsidy rationalisation plan (in 2014), we spent RM22 billion (annually),” he said in response to a question during the dialogue held at the Securities Commission here today.

Apart from Irwan, other panellists were Axcelasia Taxand Sdn Bhd group executive chairman Veerinderjeet Singh, former United Nations assistant secretary-general for economic development Jomo Kwame Sundaram, Employees Provident Fund (EPF) Economics and Capital Markets general manager Nurhisham Hussein, and Universiti Malaya’s senior research fellow at the Institute of China Studies Cheong Kee Cheok.

The weekly fuel pricing mechanism came into effect on March 29 this year. Prices of petrol and diesel were placed on a managed float system since Dec 1, 2014, following the removal of fuel subsidies in an effort to bolster the national economy, and save the government up to US$6 billion annually.

Meanwhile, on a related matter, Irwan said Prime Minister Najib Razak had announced that Chief Secretary to the Government Ali Hamsa would head a task force to oversee the implementation of all budget measures.

The PM’s announcement was made this morning.

Irwan, who will be Ali’s deputy, said the task force would also ensure that all government bodies implemented the programmes and projects stated in the budget according to schedule.

“We are not only looking at it from the perspective of the implementation schedule, but cost efficiency as well to ensure the rakyat benefits more,” he added.