Government to spend additional RM4.22 billion in fuel subsidies this year due to increase in global oil prices

Government to spend additional RM4.22 billion in fuel subsidies this year due to increase in global oil prices

The government says an additional RM4.22 billion is expected to be spent this year on fuel subsidies as a result of the increase in global oil prices, The Malay Mail reports. The amount will be used to maintain the ceiling prices that have been set for RON 95 petrol, diesel, liquefied petroleum gas (LPG) as well as cooking oil, said finance minister Datuk Seri Tengku Zafrul Abdul Aziz.

Currently, RON 95 has a capped price of RM2.05 a litre, while that for diesel is RM2.15 per litre, the ceiling prices for both having been revised on February 10 this year. As for LPG, its price of RM1.90 per kg has been in place since June 2015, while that for cooking oil (RM2.50 per 1kg pack) remains from that set in 1997.

In a statement issued yesterday, he said that the government remains committed to maintaining these ceiling prices. “The government is prepared to bear this increased subsidy expenditure to maintain the welfare of the people and the continuity of businesses, especially small business traders,” he said.

“A total of RM3.78 billion has been allocated for the year 2021 but based on the current global market prices, the government is expected to accommodate subsidies of up to RM8 billion, which is RM4.22 billion higher than the original allocation,” he added.

In 2019, the government spent RM6.32 billion in subsidies, but this dropped to RM2.16 billion last year. The reduced spending was due to global crude oil prices falling significantly as a result of an “oil war” among oil-producing countries, which saw the barrel price dropping below US$20 at one point in April last year. Pump prices also fell to RM1.25 a litre for RON 95 and RM1.46 for diesel that month, and the lack of fuel consumption last year also had plenty to do with reducing subsidies.

Separately, former finance ministry secretary-general Tan Sri Mohd Sheriff Kassim called on the government to rethink its decision on such subsidies. He said that the disadvantage of a price subsidy was that even the high-income group would benefit, and it would be better for the government to do targeted income subsidies as was done previously so that only the poor would benefit. “The best way to help the poor is to subsidise their income without wasting government funds,” he said.

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Anthony Lim

Anthony Lim believes that nothing is better than a good smoke and a car with character, with good handling aspects being top of the prize heap. Having spent more than a decade and a half with an English tabloid daily never being able to grasp the meaning of brevity or being succinct, he wags his tail furiously at the idea of waffling - in greater detail - about cars and all their intrinsic peculiarities here.

 

Comments

  • Proton oh Proton on Jun 14, 2021 at 4:06 pm

    other countries fully operate… only Malaysia total lockdown… as expected.

    Like or Dislike: Thumb up 0 Thumb down 1
    • Ghani on Jun 16, 2021 at 4:11 am

      Japan is still under major lockdown, India is also under lockdown… many other countries not just us….

      Like or Dislike: Thumb up 4 Thumb down 0
  • Leafable on Jun 14, 2021 at 4:38 pm

    So we subsidies Climate Change Acceleration. Trying to drill our only boat with more holes. How bodoh can we get to?

    Focus on the environment first lah, not human nor economy first. Without the environment there wouldn’t be any human left let alone the economy.

    Like or Dislike: Thumb up 2 Thumb down 3
  • Civic Turbo 2018 on Jun 14, 2021 at 4:38 pm

    Can anyone explain?

    Harga minyak turun: NO GOOD
    Harga minyak naik: NO GOOD

    Like or Dislike: Thumb up 0 Thumb down 0
    • Ghani on Jun 16, 2021 at 4:16 am

      Banggangs only know to komplen, go up they komplen, go down they komplen, give subsidi they komplen, no give subsidi they komplen. Syukur they are the very small minority, same spesis as antivaxxers, mouth only big but noise come out. Xperlu kesah mrk tu…

      Like or Dislike: Thumb up 5 Thumb down 1
  • Mat Golok Saudagar RON95 Botol on Jun 14, 2021 at 5:37 pm

    Bagus bagus. Teruskan tambah subsidi. Lagi mahal harga minyak di Golok, lagi banyak subsidi di Malaysia, lagi banyak untung saya dapat. Hehehe

    Like or Dislike: Thumb up 2 Thumb down 0
  • fahmi on Jun 14, 2021 at 5:54 pm

    When rakyat is under extreme difficulty now… that RM4.2 Billion should be distributed to the ppl. For food, medical and home.. the poor B40 and struggling M40 would be most grateful…

    Giving to fuel subsidies is just benefitting the rich who drive big cars… and towkays with fuel guzzling trucks and lorries. This imbecile incompetent FM …koyak, gagal, hancurr berkecai

    Like or Dislike: Thumb up 2 Thumb down 19
    • Ghani on Jun 16, 2021 at 4:13 am

      Ask not what your country do for you, ask yourself what you can do for your country

      Like or Dislike: Thumb up 8 Thumb down 0
  • iskhalifah on Jun 14, 2021 at 6:14 pm

    This subsidy scheme is not sustainable if we want to move towards cleaner production & emission.

    Like or Dislike: Thumb up 1 Thumb down 1
  • Delta Variant K.O. Extra Janica on Jun 14, 2021 at 7:06 pm

    The Economictimes published ” Oil prices slip as coronavirus gloom fester”

    Like or Dislike: Thumb up 1 Thumb down 0
    • His Friend on Jun 16, 2021 at 9:54 pm

      Bloomberg reports: Saudi Arabia raised prices for oil shipments to customers in its main market of Asia for next month, signaling the kingdom’s confidence in the region’s economic recovery.

      The decision comes after the OPEC cartel, led by the Saudis and Russia, agreed to boost daily crude production by more than 2 million barrels between May and July.

      Like or Dislike: Thumb up 2 Thumb down 0
  • That is a nice way to say. However the reality is : Government made record profits amid the pandemic due to high crude oil prices.

    Like or Dislike: Thumb up 1 Thumb down 1
 

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