No target date for diesel subsidy rationalisation, targeting mechanism not finalised by cabinet

Following the announcement that Cabinet has agreed to rationalise fuel subsidies on diesel in Peninsula Malaysia, Prime Minister Datuk Seri Anwar Ibrahim said that the full mechanism and implementation date has yet to be determined.

In terms of an issue that would have a seismic impact on the Rakyat, our government’s move to implement targeted fuel subsidies (as opposed to the blanket subsidies enjoyed today) sits comfortably at the top of that list.

The PM stated that following the overview he has given, that follow-up action is needed at this point. This will come in the form of a future announcement and more detailed explanation by Second Minister of Finance, Datuk Seri Amir Hamzah Azizan, as reported by Bernama.

To curb the worry that the removal of fuel subsidies will severely impact the cost of goods, and thereby increase the cost of living, the Ministry of Domestic Trade (KPDN) intends to implement several measures to prevent stakeholders from introducing price hikes to take advantage of the fuel price adjustments.

For now, the price of RON95 petrol remains at RM2.05 per litre, but it remains to be seen how large the scope of the full removal of a blanket fuel subsidy would be to Malaysians.

Furthermore, it has yet to be detailed how exactly the government intends on deeming an individual worthy or otherwise of the fuel subsidy, nor the mechanisms to carry this out, though it does involve the information collected in the PADU database.