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THE government will reduce petrol subsidies this year to reduce the country’s fiscal deficit, said Economy Minister Rafizi Ramli.
He said that the government will implement a gradual reduction in subsidies with the risk that inflation may increase before the plan is implemented.
“We are on the right track to provide targeted assistance to the needy. The government will still implement it (petrol subsidy rationalisation).”
Financial news outlet Bloomberg reported him saying that the government was “sticking to it”.
“To achieve the fiscal target of 4.3%, the timeline set must be adhered to,” he said.
Last year, Rafizi was reported to have said that the government would implement a subsidy programme targeting RON95 in the second half of 2024.
He said the establishment of the Central Database Hub (Padu) in January 2024 will provide access to data needed to implement targeted programmes such as subsidy rationalisation or social welfare reforms.
The Pandan MP said the government must “manage the sequence” of the reduction, considering the possibility of inflation increasing even before subsidy reductions are put into effect.
“It is expected that there will be dissatisfaction and problems once it is implemented, but the government cannot afford a U-turn when it is implemented,” he said.
Despite the decline in the ringgit’s value, Rafizi said it has not deterred foreign investor interest or hindered the government’s aspirations.
“As far as the Economy Ministry is concerned, we do not see ringgit fluctuations beginning to hurt our long-term restructuring,” he added. – The Vibes, April 17, 2024
