Targeted diesel subsidy is the priority, says Amir

The government’s priority is the targeted diesel subsidy, Second Finance Minister Amir Hamzah Azizan said.

“We must think about how we implement our targeted subsidies (in general). Right now, the government’s priority is the diesel subsidy.

“When we have reached (some) stability with the diesel subsidy, then we will see what needs to be done next,” he said.

He was commenting on a report from Maybank Investment Bank (MIB), which suggested that the price of RON95 petrol would need to rise by 32 sen per litre, or 15.6%, starting from July 1.

This increase is necessary for the government to save RM4.1 billion and meet its goal of reducing subsidy expenditure by RM11.5 billion in the 2024 budget, he added.

He said this at a press conference on the sidelines of the 2024 Sasana Symposium at Sasana Kijang here today.

Amir highlighted in his opening speech at the symposium that the government’s decision to introduce the targeted diesel subsidy was a bold move, especially in light of the current macroeconomic conditions characterised by robust growth and moderating inflation.

“The government took it in its stride to cut the billion ringgit losses from the massive leakages through smuggling and misappropriation of diesel subsidy, which had impeded the nation’s economic growth and public delivery system for years,” Amir said, reported Free Malaysia Today.

He assured that the targeted subsidy policy was not an impulsive decision but a well-planned strategy designed to mitigate the impact on daily goods, prevent profiteering, and shield vulnerable populations from price increases.

According to Dagang News, MIB’s chief economist Suhaimi Ilias stated on Monday that if targeted subsidies for RON95 were implemented starting October 1, the price would need to increase by 65 sen per litre, or 31.7%, to achieve the RM4.1 billion savings target for the fourth quarter of 2024.

As of June 10, bulk diesel subsidies ended in Peninsular Malaysia, and prices are now susceptible to market fluctuations. Retail stations throughout the Peninsula have set diesel prices at RM3.35 per litre.

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