PETALING JAYA: The government will introduce a targeted subsidy mechanism for RON95 in the second half of 2024, says economy minister Rafizi Ramli.
He said this is to ensure the subsidy is delivered in a targeted manner to “those who need it most” and to optimise Putrajaya’s resources.
“Sidestepping issues of duplication enables the government to take a decisive step away from previous administrations.
“A country where the T20 group is receiving 53% of blanket fuel subsidies is not a sustainable model, nor is it an equitable one.
“In light of this, the government will roll out a RON95 subsidy programme in the second half of 2024,” he said at the national economic outlook conference at the Tun Razak Exchange (TRX) in Kuala Lumpur today.
Currently, RON95 is subsidised by Putrajaya and sold at RM2.05 per litre.
Unveiling the 2024 budget last month, Prime Minister Anwar Ibrahim said the subsidy for diesel would be rationalised in phases.
This is part of the government’s efforts to rationalise subsidies as a whole, with RM55.443 billion spent for that in 2022.
Rafizi said the government needs to find new ways to mobilise its resources while reducing leakages and wastage. The targeted RON95 subsidy is in line with this effort, he said.
“One inescapable dimension of this is addressing our revenue inadequacy by increasing our tax collection. Spending more money than we have is never conducive to a dynamic, sustainable state.”
He said the Padu integrated database would be especially crucial to enabling the government to rationalise its subsidies or even implement social welfare reforms.
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