The targeted implementation of subsidies are being considered is not expected to increase costs for existing industries, said Deputy Finance Minister I Datuk Seri Ahmad Maslan.
He said, however, the government still emphasises the implementation and effective communication aspects to the industry so that there is no shock to the economy.
“The current fuel subsidy is aimed at reducing the impact of the increase in the cost of living of the people following the increase in the price of fuel in the market, especially for the low and middle income groups.
“In order to continue to protect consumers from the effects of the increase in the real price of crude oil in the global market, the government still maintains the ceiling price of RON95 petrol at the rate of RM2.05 per liter and diesel at the rate of RM2.15 per liter until now, even though the actual market price of both products has exceed the set ceiling price level,” he said during a question and answer session at the Dewan Negara today (Nov 27)
He said this when responding to a question from Senator Nik Mohamad Abduh Nik Abdul Aziz who asked the Minister of Finance to state whether the rationalisation of subsidies and tax reforms can have an impact on the low and middle income groups.
Meanwhile, Ahmad said in relation to tax reform measures, any change in tax-related policy will take into account the impact on the economy and the cost of living of the people.
“Accordingly, the Government is always monitoring the current economic situation and considering fiscal measures that suit short and medium term needs.
“The government will also continue to engage with all stakeholders to study aspects of reforming the national taxation system,” he said.
Subsidy is a government grant to ease the burden of the people by covering part of the cost that must be paid to obtain essential goods, transport services and financing from various funds provided.
The purpose of providing subsidies is to stabilise the price of certain goods or services in the Government’s efforts to help reduce the financial burden of the people.
The actual price of diesel is RM2.80 per liter but the government has borne a subsidy of 65 sen making the market price of diesel RM2.15 at this point.
Ahmad said the government will ensure that when the targeted subsidy is implemented next year which is expected in March 2024, the government will start with diesel first and then RON95 the following month.
“To ensure that the price of goods does not rise, the diesel subsidy for vehicles carrying goods will continue to remain, so there is no reason for the price of goods to rise as the price remains at RM2.15 per litre.
“For private vehicles in Sabah and Sarawak we still remain at RM2.15 per litre, for fishermen we also maintain RM1.65 per liter and public transport such as school buses remain at RM1.88 per liter despite targeted subsidies,” he said.
Ahmad thinks what is important is law enforcement when targeted subsidies are implemented.
“The Ministry of Domestic Trade and Cost of Living (KPDN) has many officers to combat leakages, they enforce 12 acts and they also strive to create ethical traders to ensure that the people and consumers are always protected,” he said.
