SINCE June 10 when diesel prices at the pump were floated, Malaysians have been bracing for the same to hit RON95 petrol. Most Malaysian vehicle owners use RON95 compared with diesel and the hike would make their already thinning wallets even lighter.
That Malaysians will need to pay market or close-to-market rates for fuel is never in doubt. The Madani government has been setting the ground for that eventuality by constantly reminding the people that the bulk subsidies model is not sustainable.
The argument goes that subsidies are meant for the lower-income groups like B40 and M40 but as it turns out, the main beneficiaries of the RON95 subsidies are the T20 with their fuel-guzzling four-wheelers.
But if the recently implemented targeted diesel subsidy plan is anything to go by, Malaysians cringe at the prospect of not just paying more at the pump but also the spillover effects such as the inevitable inflation.
While RON95 is selling for RM2.05/litre now, speculation is rife that it could climb to RM3.50/litre if allowed to float. That would constitute a hike of over 70% and it is unlikely that any cash aid by the Madani government could make up for the difference.
In the case of diesel, the government is only handing out a RM200/month Budi Madani rebate to eligible vehicle owners – a sum many feel was paltry.
Shelving RON95 price hike
This has made the Madani administration a lightning rod as netizens take it out on the government for hiking prices at a time of sluggish economic growth. To make matters worse, many have dug up promises by Pakatan Harapan (PH) leaders when in the Opposition to reduce prices at the pump, not raise them.
While Prime Minister Datuk Seri Anwar Ibrahim has borne the brunt of the netizen’s fury, coming in close is “formula czar”, Economy Minister Rafizi Ramli.
While in the opposition, the ex-PETRONAS senior manager had come up with all sorts of untested “formulas” to alleviate the cost of living problems for the people, including lowering the prices of petrol.
Mounting anger towards Anwar and Rafizi had weighed down on the popularity of the 18-month administration with speculations rife that this fragile unity government is set to be ousted come the next polls, if not earlier.
This will buy the Anwar administration breathing space as it consolidates its position in the run-up to the 16th General Election (GE16).
On plans to float RON95, Rafizi was recently quoted as saying: “We will keep our cards close to our chest in the same way we surprised everyone with diesel. So, we did surprise everyone with diesel, and I think everyone is up for another surprise.”
While Rafizi was alluding to the much-talked hike in RON95, will he surprise Malaysians by announcing that the Government will hold off the plan to a more suitable time (or at least consider a more gradual rise)?
Doing so may win the government some brownie points and boost its chances of being retained come GE16 but inevitably at the expense of the country’s long-term fiscal health taking a beating with the soaring subsidies bill exceeding RM80 bil last year.
To echo Rafizi, just bear in mind that this Madani government has the uncanny ability to keep surprising the people, notably with the appointment of UMNO president Datuk Seri Zahid Hamidi as Deputy Prime Minister (DPM) or with its sluggish pace of reforms like separation of roles for the Attorney-General (AG) and Public Prosecutor.
One would just have to wait for Rafizi to pull the rabbit out of the hat. It, however, remains to be seen if Malaysians will be entertained or be queasy by the Pandan MP’s “surprise” act. – June 28, 2024
