PM confirms no immediate plans for targeted RON95 subsidy

KUALA LUMPUR: The Prime Minister has clarified that the implementation of targeted subsidies for RON95 fuel is not currently under consideration.

According to Berita Harian, Datuk Seri Anwar Ibrahim stated that the government prefers to focus on explaining the rationale behind the diesel subsidy rationalization to the public first.

“(Targeting the RON95 subsidy) is not being discussed at the moment. We want to address the issue with diesel, provide a clear understanding, because sometimes (the issue) gets twisted.

“I’ve said that if there is a real problem with diesel, let us know (the government). We do not want to burden the people. But if we do nothing, revenue won’t increase, and debt won’t decrease,” he told the media after officiating the National Tax Conference 2024 here today.

Anwar mentioned that the rationalization of subsidies is part of the government’s comprehensive efforts and initiatives aimed at covering a broader spectrum to help reduce the government’s annual borrowing.

Recently, the Ministry of Economy stated that the targeting mechanism for RON95 subsidies will fully utilize data from the Main Database (PADU), while the target group determination will be based on the net disposable income of households.

According to the ministry, the PADU system is a repository of data on individuals and households of citizens and permanent residents residing in Malaysia.

As of March 31, 2024, 10.55 million individuals have updated their information in the PADU system.

“Currently, the system is in Phase 2, involving data analysis processes to determine households, essential living expenses, and net disposable income,” said the ministry in a written response published on the Parliament’s website.

The price of diesel at all retail stations in Peninsular Malaysia was set at RM3.35 per liter, which is the market price without subsidy, starting from 12:01 AM on June 10.

This is the market price without subsidy based on the average of May 2024, according to the Automatic Pricing Mechanism formula.

The targeted diesel subsidy pricing and implementation could result in savings of RM4 billion annually and strengthen the country’s financial position in the long term.