Economy Minister Rafizi Ramli has shared another update on the targeted subsidy programme for petrol and diesel, this time with regard to the RON95 petrol. Specifically, he said that the new RON95 petrol subsidy programme will be rolled out in the second half of 2024 (2H24).

The minister also reiterated that the current subsidy model is both unsustainable and unfair, given that it is primarily the T20 households that have benefited from it. It is estimated that this group – which is defined as households with a combined earning of RM10,960 or more per month – make up 53% of the subsidy recipients.

“The government will roll out a RON95 subsidy programme in 2H24, as we look to optimise our resources towards those that need it most. I know analysts keep asking why it takes so long, because we’ve seen how it’s done in other countries. The sequencing is important, which means getting everything ready,” said Rafizi, adding that the government has learnt from the consequences of previous policies that were hastily implemented.

Rafizi also acknowledged that there is bound to be teething problems, with certain quarters being unhappy with the change, but “we can’t afford the U-turn”. Malaysia’s public finances have been running a fiscal deficit of more than 5% for three consecutive years, and therefore the government must reduce leakages within the system while it finds new ways to increase its revenue, he said.

For context, Rafizi had commented earlier this month that the targeted subsidies for petrol and diesel will likely be implemented after March 2024, and this latest update offers further clarity to the government’s timeline.

Aside from sharing the timeline for RON95 petrol, Rafizi also mentioned that he is set to table the progressive wage policy as a white paper in the Parliament tomorrow, in a bid to fix the systemic issue of the country’s low wages.

 “It remains shocking to me that our median wage is only RM11 above the poverty line in this country. The real challenge in the future is how to tap into the best talents. Better talents will translate into better productivity, and you can only attract good talents with reasonable employee compensation,” Rafizi said, although he also reminded that wage growth must be accompanied by upskilling efforts on the employees’ part.

To note, Malaysia’s median wage in early 2023 stood at RM2,600, barely above the national poverty line of RM2,589.

(Sources: The Edge Malaysia, Malay Mail)

• TAGS:
• Blanket Fuel Subsidy
• Blanket Subsidies
• Government Subsidies
• Petrol Subsidy
• Petrol Subsidy Programme
• Rafizi Ramli
• RON95