Malaysia’s fuel subsidy cuts create public annoyance

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U9I7B8K2D9The Malaysian government slashed its subsidies for RON95 petrol and diesel starting from October 2. The fuel price hike took many Malaysians by surprise. But the government said the move is in line with Malaysia’s long-term plans to balance its budget.

At the stroke of midnight, prices of the widely-used RON95 petrol and diesel were pushed up by 6 US cents per liter, the result of the first slash to government fuel subsidies in more than a year.

The hike angered many Malaysians – not least because they were given mere hours’ notice.

Awang Ahmad, a retiree, said: “This, to me, seemed like an emergency. (The government should) at least give us three or four months’ notice. As a citizen, I think this isn’t very good, because the people don’t make that much money. So if it was possible, they should’ve taken their time with it.”

Irene Cheong, a company secretary, said: “Do you know the chain of events that’s going to happen when the petrol price is being raised? Everything is going to go up. Immediately, I can bet you.”

The subsidy cut comes days before the Muslim celebration Hari Raya Haji, and ahead of what is expected to be a painful budget announcement next week.

The Malaysian government said it knows the move would have been unpopular regardless of when it was implemented. But it is asking the Malaysian people to accept and understand that what it is doing is for the sake of the nation.

Hasan Malek, Malaysia’s Domestic Trade, Cooperatives and Consumerism Minister, said: “The increase of the price of fuel is not aimed at burdening the people. Instead, it’s to make sure the country’s finances remain strong and to reduce petrol smuggling activities by irresponsible people. We want to save the government’s money to allow us to have many programmes to develop infrastructure for the welfare and well-being of the people.”

Even with subsidy cuts, the Malaysian government said it will spend more than $6 billion on fuel subsidies this year alone. Still, Malek said the government will help cushion the blow of the price hikes through steps to be announced in the national budget.

He did not, however, discount further subsidy cuts in the near future. “I can’t promise anything. This depends on the current economic situation,” he said.

Malaysia wants to narrow its fiscal deficit to 3.5 per cent this year, with hopes for a balanced budget by 2020. Aside from slashing subsidies, its fiscal consolidation plan includes introducing a Goods and Services tax next year – a tax the government is also considering imposing on fuel.

 

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Reading Time: 2 minutes

The Malaysian government slashed its subsidies for RON95 petrol and diesel starting from October 2. The fuel price hike took many Malaysians by surprise. But the government said the move is in line with Malaysia’s long-term plans to balance its budget.

Reading Time: 2 minutes

U9I7B8K2D9The Malaysian government slashed its subsidies for RON95 petrol and diesel starting from October 2. The fuel price hike took many Malaysians by surprise. But the government said the move is in line with Malaysia’s long-term plans to balance its budget.

At the stroke of midnight, prices of the widely-used RON95 petrol and diesel were pushed up by 6 US cents per liter, the result of the first slash to government fuel subsidies in more than a year.

The hike angered many Malaysians – not least because they were given mere hours’ notice.

Awang Ahmad, a retiree, said: “This, to me, seemed like an emergency. (The government should) at least give us three or four months’ notice. As a citizen, I think this isn’t very good, because the people don’t make that much money. So if it was possible, they should’ve taken their time with it.”

Irene Cheong, a company secretary, said: “Do you know the chain of events that’s going to happen when the petrol price is being raised? Everything is going to go up. Immediately, I can bet you.”

The subsidy cut comes days before the Muslim celebration Hari Raya Haji, and ahead of what is expected to be a painful budget announcement next week.

The Malaysian government said it knows the move would have been unpopular regardless of when it was implemented. But it is asking the Malaysian people to accept and understand that what it is doing is for the sake of the nation.

Hasan Malek, Malaysia’s Domestic Trade, Cooperatives and Consumerism Minister, said: “The increase of the price of fuel is not aimed at burdening the people. Instead, it’s to make sure the country’s finances remain strong and to reduce petrol smuggling activities by irresponsible people. We want to save the government’s money to allow us to have many programmes to develop infrastructure for the welfare and well-being of the people.”

Even with subsidy cuts, the Malaysian government said it will spend more than $6 billion on fuel subsidies this year alone. Still, Malek said the government will help cushion the blow of the price hikes through steps to be announced in the national budget.

He did not, however, discount further subsidy cuts in the near future. “I can’t promise anything. This depends on the current economic situation,” he said.

Malaysia wants to narrow its fiscal deficit to 3.5 per cent this year, with hopes for a balanced budget by 2020. Aside from slashing subsidies, its fiscal consolidation plan includes introducing a Goods and Services tax next year – a tax the government is also considering imposing on fuel.

 

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