Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi stated that the blanket diesel subsidy has opened up opportunities for unscrupulous parties to take advantage and smuggle the commodity in the black market. He also mentioned that the current method of granting subsidies is not fair as it benefits not only the target group but also high-income groups and non-citizens.
He emphasized that the subsidy should be helping the right people such as fishermen and consumers but has been misused by certain quarters. These comments were made during the opening of the Symposium on Cost of Living (SCOL) 2023 held in Putrajaya on Tuesday (Nov 28), and were delivered by Acting Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali.
In his speech, Ahmad Zahid referred to the Impact Study Report on Petrol and Diesel Subsidy Programme for Selected Transport Sectors, which indicated that the T20 (top 20%) group used RM399 worth of RON95 petrol per month on average while the B40 (bottom 40%) group used an average of RM243 per month.
He mentioned a huge amount spent on subsidies in 2022, totaling RM91.9bil, and projected the figure to hit RM80.9bil for this year. According to him, the continuation of this scenario is not optimal from a fiscal perspective, and the government needs to improve the delivery of aid to make it more targeted for the people.
He highlighted the importance of careful implementation of targeted subsidies as it would have impacts on various groups of society and economic sectors. He also stressed the need for study on the expected direct impact on the inflation rate through the consumer price index before implementing targeted subsidies. Additionally, he mentioned the need to promote existing methods like waqaf, endowment, and social enterprise to complement subsidy rationalization.
“If we have social protection guarantees and retargeting of subsidies and parties like waqaf and baitulmal play their role, I believe we can put a stop to EPF withdrawals by contributors due to extraordinary emergencies,” he added. More than 600 people are participating in the two-day SCOL 2023, which is organized by the National Action Council on Cost of Living (NACCOL) and the Domestic Trade and Cost of Living Ministry. – Bernama
