The Malaysian government may soon introduce a targeted fuel subsidy mechanism to cushion the impact of rising crude oil prices, said International Trade and Industry (MITI) Minister Datuk Seri Mohamed Azmin Ali.
The minister said the government is still working on a suitable structure after a steep hike in the projected fuel subsidy that costs the government about RM28 billion this year, which is more than twice of what it was last year at RM11 billion.
According to Bernama, Azmin said this matter was discussed during a special retreat that was held recently.
“We talked about the review in a special retreat recently. Those with BMWs cannot enjoy the same subsidies as those with Kancil.” he said.
However, he did not reveal the details of the amount of savings that will be made from this policy change.
He then explained that the savings could instead be channelled into more subsidies for agriculture and food security, which has been taking a hit due to dependency on imports for foodstuff, fertiliser and a dearth in technological applications and research and development (R&D).
He added that the money can also be used to beef up enforcement mechanism for agricultural subsidies to ensure there is no leakages.
Meanwhile, Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed also said the structure for the targeted fuel mechanism is expected to be completed soon.
Last month, Petronas disclosed that it had been working closely with the Ministry of Finance (MOF) on the increase of fuel subsidy bill amid near-record high crude oil prices globally.
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