PUTRAJAYA: The RM4 billion savings achieved from the implementation of targeted subsidies for diesel will be spent on covering public transportation costs and cash aids for the people such as Sumbangan Tunai Rahmah (STR), said Datuk Seri Anwar Ibrahim.
The prime minister said the government's cost for the STR, for example, had risen to nearly RM10 billion as the number of recipients had reached nine million people.
He also noted that the Sumbangan Asas Rahmah (Sara) cash aid for poor and hardcore poor households had increased from RM600 to RM1,200 a year.
"This money (from the re-targeting of subsidies) is not used to increase the allowances of ministers or other ministries.
"The subsidy rationalisation is to ensure that the subsidies do not go to the ultra rich and to foreigners."
He said this in his speech at the Finance Ministry's monthly assembly here, this morning.
Also present were Finance Minister II Datuk Seri Amir Hamzah and deputy Finance Minister Lim Hui Ying.
On Sunday, Amir announced that diesel subsidies for certain groups in Peninsular Malaysia had been discontinued starting midnight on June 10.
This, he said, would set the price of diesel at RM3.35 per litre according to the automated pricing mechanism, up from the current price of about RM2.15 per litre.
To cushion the impact of the new diesel price, the government had introduced the Budi Madani individual and Budi Madani Agri-commodity cash aid programmes.
About 30,000 eligible recipients of this aid would receive RM200 in their respective accounts.
The government had also introduced fleet cards under the Subsidised Diesel Regulation System for public transport companies and those transporting goods.
Meanwhile, Anwar, who is also Finance Minister, said the subsidy rationalisation for diesel was the third initiative implemented by the government to restructure the country's subsidy distribution system.
The first was a rationalisation of subsidies for electricity tariffs which would save RM4.5 billion, and subsidies for the sale of chicken, saving RM1.2 billion a year.
He said while the move was "unpopular" and may cause a negative political impact, subsidy rationalisation must be done for the benefit of the majority.
The discussion on the matter, he said, had in fact happened over 25 years ago when he was Finance Minister in the 1990s, but could not be done due to political considerations.
"Usually political leaders will think about the negative impact when taking away subsidies or increasing taxes, because politically, it is burdensome.
"But I told the cabinet ministers that we must make a good decision and help the majority of the people.
"We must not be giving subsidies to the ultra rich, large industries and foreigners…We are not discriminating against foreigners but they do not pay tax, and their levy tax is small.
"Therefore, our responsibility is firstly to our people," he added.