RON95 petrol should be next after Malaysia's diesel subsidy cuts, says consumer group

Source: The Straits Times

GEORGE TOWN - The rationalisation of RON 95 petrol subsidies will result in greater savings for the government and should be the next move after the targeted diesel subsidy, says the Consumers' Association of Penang (CAP).

Its president Mohideen Abdul Kader said vulnerable groups affected by fuel rationalisation policies can be given financial aid to cope with rising costs.

"Fuel subsidies, including diesel, amount to a whopping RM60bil annually which is 1.5 times the amount allocated for healthcare (around RM40bil) in Budget 2024.

"A modern 1,000-bed hospital costs between RM1.3bil and RM 1.4bil.

"We could have better-equipped hospitals and vastly improved healthcare with the money from removed subsidies," he said in a statement on June 12.

Mr Mohideen said the price of Malaysia's subsidised petrol (RON 95) makes it the cheapest in nine Asean countries.

"The petrol price in Malaysia is 47.44% less than in Indonesia (RM3.90) and 54.24% less than in Vietnam (RM4.48).

"Blanket subsidies are not sustainable as they stress the country's coffers.

"In 2020, the government spent RM4.66bil on total subsidies; in 2021, RM13.13bil; and in 2022, close to RM80bil which was described as the highest in its history," he said.

Mr Mohideen said the fuel subsidy rationalisation must be implemented without any U-turn owing to pressure from those with vested interests and political affiliations.

"Government leaders must bite the bullet when implementing policies perceived to be unpopular but in the long term, will make our economy resilient and benefit the people and nation," he said.

He said beginning with the targeted diesel subsidy, which was implemented from June 10, was the right move.

"Subsidies must be for those in need and not for everyone regardless of economic status.

"By implementing this rationalisation policy, the government will have at its disposal RM4bil, possibly more, for economic development and social welfare.

"The recipients of subsidies must be empowered so that, after a time, they can stand on their own feet and not be dependent on handouts," he said.

Mr Mohideen said implementation of such policies must be monitored to ensure that there are no leakages or abuse.

"The subsidies must go to the targeted individuals, groups and businesses and not be hijacked by corrupt elements.

"The Domestic Trade and Cost of Living Ministry must monitor the prices of goods and services to prevent profiteering by unscrupulous traders taking advantage of the removal of diesel subsidies.

"According to economic experts, it will only have a minimal effect on the cost of carrying out their businesses.

"Therefore, there is no justification for hiking prices and firm action must be taken against the profiteers, including prosecuting them and cancelling their licences," he said.

Mr Mohideen said with the savings on fuel subsidies, the government should improve public transportation which is generally lacking in the country, ensuring frequent service as well as an efficient feeder bus system for greater convenience to the commuters.

"This will reduce the number of private cars on the roads, leading to energy savings and reduced environmental pollution," he said. THE STAR/ ASIA NEWS NETWORK