DUBAI: THE government is still studying proposals to ensure the best fuel subsidy rationalisation scheme will be implemented in the middle of next year.
For diesel, a new subsidy scheme will be implemented earlier.
Prime Minister Datuk Seri Najib Razak said the present system would continue until the best mechanism had been found, and only then would the government announce the scheme.
“It’s a bit premature at this stage as we have only just requested for proposals, which means we will not implement it immediately. So, the present system will continue until we are ready to implement it once we go through the request for proposals and decide on the best one, (only) then will the government announce the full package.
“The problem is we announced not the entire package, thus a lot of questions are being asked. That (is) the downside of just announcing just one aspect.
“We have not announced the entire package, and I cannot announce the entire package until we have gone through the proposals and the government has decided on the best one for us to adopt,” he said here on Wednesday.
In this respect, Najib, who is also finance minister, said the people should not worry and assured them that they would be informed of the proposal that was chosen.
“Relax about it. There is no change (for) now, and everybody will still enjoy (subsidised) RON95 until we decide on the proposed new package to rationalise the subsidy.
“I don’t want to announce it piecemeal. If I comment (on) it now, it is not fair as we have not seen the proposals yet. The proposals are being evaluated,” said Najib, who had attended the World Islamic Economic Forum that ended on Wednesday.
It was proposed that those earning below RM5,000 per month would enjoy the full subsidy, while those earning more than RM10,000 would not be eligible. Those who fall in the income bracket in between would enjoy a partial subsidy. It was reported that this proposed scheme would be implemented in June next year.
On whether the proposal that was announced would be implemented, Najib said this would be subject to the final proposal.
“It will only be final once the government decides on the package.
“I think we need some time for us to study all elements to ensure the implementation of the new targeted subsidy as part of the subsidy rationalisation would meet the desired objectives, which would ultimately save a lot of money for the government and could be channelled to productive expenditure.”
Earlier this month, the subsidies for RON95 petrol and diesel were reduced by 20 sen, putting the retail price of RON95 at RM2.30 per litre and diesel at RM2.20 per litre. The market price for RON95 is RM2.58 per litre, while diesel costs RM2.52 per litre.
The Domestic Trade, Cooperatives and Consumerism Ministry had stated that despite the subsidy reduction, the government would still be spending more than RM21 billion this year on subsidies for the two fuels, as well as for liquified petroleum gas.