Government “sticking” with cutting back on petrol subsidies this year, claims Rafizi

In an effort to lower the nation’s budget deficit, the government will cut gasoline subsidies this year, according to Economy Minister Rafizi Ramli.

According to him, the government would gradually reduce subsidies, however there is a chance that inflation may rise before the plan is carried out.

“We are on the right track to provide targeted assistance to the needy. The government will still implement it (petrol subsidy rationalisation).”

Financial news outlet Bloomberg reported him saying that the government was “sticking to it”.

“To achieve the fiscal target of 4.3%, the timeline set must be adhered to,” he said.

Rafizi reportedly stated last year that the government would launch a subsidy program in the second half of 2024 that would aim RON95.

According to him, the Central Database Hub (Padu) would be established in January 2024 and will give users access to the data they need to carry out specific initiatives like social welfare reforms or the rationalization of subsidies.

The Pandan MP stated that in light of the potential for inflation to rise even prior to the implementation of subsidy reductions, the government must “manage the sequence” of the reduction.

“It is expected that there will be dissatisfaction and problems once it is implemented, but the government cannot afford a U-turn when it is implemented,” he said.

Rafizi stated that the government’s objectives have not been obstructed or foreign investor interest discouraged by the ringgit’s falling value.

“As far as the Economy Ministry is concerned, we do not see ringgit fluctuations beginning to hurt our long-term restructuring,” he added.

-Agency