The federal government says a further RM4.22 billion is predicted to be spent this yr on gas subsidies on account of the rise in international oil costs, The Malay Mail experiences. The quantity can be used to take care of the ceiling costs which were set for RON 95 petrol, diesel, liquefied petroleum fuel (LPG) in addition to cooking oil, stated finance minister Datuk Seri Tengku Zafrul Abdul Aziz.
At the moment, RON 95 has a capped value of RM2.05 a litre, whereas that for diesel is RM2.15 per litre, the ceiling costs for each having been revised on February 10 this yr. As for LPG, its value of RM1.90 per kg has been in place since June 2015, whereas that for cooking oil (RM2.50 per 1kg pack) stays from that set in 1997.
In an announcement issued yesterday, he stated that the federal government stays dedicated to sustaining these ceiling costs. “The federal government is ready to bear this elevated subsidy expenditure to take care of the welfare of the individuals and the continuity of companies, particularly small enterprise merchants,” he stated.
“A complete of RM3.78 billion has been allotted for the yr 2021 however based mostly on the present international market costs, the federal government is predicted to accommodate subsidies of as much as RM8 billion, which is RM4.22 billion larger than the unique allocation,” he added.
In 2019, the federal government spent RM6.32 billion in subsidies, however this dropped to RM2.16 billion final yr. The lowered spending was as a result of international crude oil costs falling considerably on account of an “oil conflict” amongst oil-producing nations, which noticed the barrel value dropping under US$20 at one level in April final yr. Pump costs additionally fell to RM1.25 a litre for RON 95 and RM1.46 for diesel that month, and the shortage of gas consumption final yr additionally had loads to do with lowering subsidies.
Individually, former finance ministry secretary-general Tan Sri Mohd Sheriff Kassim known as on the federal government to rethink its resolution on such subsidies. He stated that the drawback of a value subsidy was that even the high-income group would profit, and it could be higher for the federal government to do focused revenue subsidies as was accomplished beforehand in order that solely the poor would profit. “The easiest way to assist the poor is to subsidise their revenue with out losing authorities funds,” he stated.
