To the dismay of many, the price of RON95 has increased by 20 Sen. This is one of the measures used to rationalise subsidies by the Government to reduce Malaysia’s fiscal deficit. Before this, the price for RON95 was RM1.90 per litre and RM1.80 for diesel.
According to Prime Minister Datuk Seri Najib Tun Razak, this move will help the Government to save RM1.1bil from September to December this year and RM3.3bil annually.
“Currently, the Government subsidises 83 sen for each litre of RON95 petrol and RM1 for a litre of diesel,” said Najib.
“This brings the total fuel subsidy allocation for 2013 up to RM24.8bil. The reduction of 20 sen in fuel subsidy means that the Government will still subsidise 63 sen per litre of RON95 and 80 sen per litre of diesel.”
Many were expecting the increase but had expected it to be announced during the tabling of the Budget. The Prime Minister will, however, increase the quantum for BRIM, or the 1Malaysia People’s Aid, to help ease the burden for low-income groups.
According to a report in The Star, “Najib said the FPC had reaffirmed the Government’s commitment to achieve a fiscal deficit target of about 3% of gross domestic product by 2015 and attain a balanced budget by 2020.”
“The moderation in the current account of the balance of payments (BOP), coupled with continued fiscal deficits pose medium-term risks to the economy.
“Currently, our subsidy system benefits everyone, including the higher income group and foreigners.
“Thus, we need to move to a more targeted subsidy system that caters to vulnerable groups,” Najib said.
Story and quote from: The Star