Press Statement by YB Chong Chieng Jen:
The Government has received the public feedback on the proposed introduction of the targeted fuel subsidy scheme for both RON95 and diesel and has yet to make a final decision on the matter.
The initial proposed targeted petrol subsidy scheme was only for the B40. However, such proposal has yet to be finalised and confirmed by the cabinet.
At present, what we have is the general fuel subsidy scheme, ie. fixing the Petrol RON95 price at RM2.08 per litre and diesel price RM2.18 per litre. Without this general fuel subsidy scheme, the price of RON95 will be RM2.49 per litre and diesel RM2.39 per litre, given the current international crude oil price.
One point to note, the previous BarisanNasional Government has removed the general fuel subsidy scheme without any targeted fuel subsidy scheme in place. Had BarisanNasional continues to be the government of the day, all of us would have been paying RON95 at approximately RM2.50 per litre and diesel at RM2.40 per litre for the past one year.
With the current general fuel subsidy scheme, the total estimated subsidy that the government pays to maintain the current fuel prices is approximately RM173 million per week. The total estimated subsidy paid out by the government to the oil companies to maintain the current price of RON95 at RM2.08 per litter and diesel at RM2.18 per litter is approximately RM7 billion a year.
As such, given the high government debt, there is the fiscal pressure to reduce this subsidy burden on the Government by introducing the targeted fuel subsidy scheme.
However, the cabinet has yet to make a decision whether to maintain the current general fuel subsidy scheme, or to introduce the targeted fuel subsidy or a hybrid scheme, whether the subsidy be confined to B40 or also to include the M40 as well.
This will be decided by the cabinet ministers collectively and announcement likely to be made in the tabling of the Budget on 11-10-2019.
Till then, prices of RON 95 and diesel are maintained at RM2.08 per litre and 2.18 per litre respectively.
Chong Chieng Jen
Deputy Minister for Domestic Trade and Consumer Affairs