BASED on the experience gained form implementing the removal of diesel fuel subsidies, Putrajaya’s next move should be the rationalisation of RON95 petrol, said the Consumers’ Association of Penang (CAP).
Its president Mohideen Abdul Kader said the move will produce larger savings for the government, and vulnerable groups affected by the fuel rationalisation policies can be given financial assistance to meet the increased costs.
He said fuel subsidies, including diesel, amount to a whopping RM60 bil annually which is 1.5 times the amount allocated to healthcare (around RM40 bil) in Budget 2024.
“A modern 1,000-bed hospital costs between RM1.3 bil to RM1.4 bil. Just imagine what we could do with the savings from removing subsidies, which can translate to better-equipped hospitals and vastly-improved healthcare,” Mohideen said in a statement on Wednesday (June 12).
He further noted that the price of Malaysia’s subsidised petrol (RON 95) makes it the cheapest in nine Asean countries, with the petrol price in Malaysia being 47.44% less than that of Indonesia (RM3.90) and 54.24% less than that of Vietnam (RM4.48).
Citing the government’s expenditure of RM4.66 bil on total subsidies in 2020, RM13.13 bil in 2021 and close to RM80 bil in 2022 which was described as the highest in its history, Mohideen said that blanket subsidies are not sustainable as they stress the country’s coffers.
“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,” he stated.
“This will reduce the number of private cars on the roads leading to energy saving and reducing environmental pollution.”
No U-turn for fuel subsidy rationalisation
Mohideen further stressed that the fuel subsidy rationalisation must be implemented without any U-turn owing to pressure from those with vested interests and political affiliations.
He said government leaders must bite the bullet when implementing policies perceived to be unpopular, adding that in the long term, these unpopular policies will create a resilient economy that will benefit the people.
“Beginning with targeted subsidies for diesel fuel is the right move. Subsidies must be for those in need and not for everyone regardless of their economic status,” he reckoned.
“By implementing this rationalisation policy, the government will have at its disposal RM4 bil – one well-known economist estimates RM 8 bil – for economic development and social welfare.
“The recipients of subsidies must be empowered so that, after a period, they can stand on their own feet and not be dependent on handouts.” – June 12, 2024
Main pic credit: VOCKET
