Economy Minister Rafizi Ramli said that the timeline for the rationalisation of diesel subsidy will be announced when it is ready, in a bid to avoid speculative inflation.

Rafizi explained that the government needs to take into consideration several factors in implementing the initiative, such as a proper sequencing that would ensure the balance between wage growth, increasing public income, and inflation. As such, it may take some time for the rationalisation to take place, with the final decision to be made by the Cabinet.

That said, Rafizi reassured that the initiative is slated to take place this year. “(It will happen) because a lot of work, discussion, and coordination have been done. The plan began with Padu (Central Database Hub), which was to guarantee data availability when the government decides to take action. The data is ready, awaiting the government’s decision on the mechanism to employ,” he further said.

Last month, Rafizi confirmed that the government is on track to remove the blanket fuel subsidy within the year as it seeks to reduce the national fiscal deficit and to concentrate on aiding the poor and those who truly need it. At that time, he also highlighted that a certain timeline needs to be abided by in order to reach the fiscal target of 4.3%.

For further context, the issue of targeted subsidies has been frequently discussed by the government since the start of the Covid-19 pandemic, with extensive studies carried out for its implementation. Since then, several approaches and channels have also been proposed for the disbursement of the subsidy, including e-wallets and the MySejahtera mobile app.

Most recently, Rafizi said that the government will be considering three approaches for initiative, focusing on determining a recipient’s eligibility based on their net disposable income. Meanwhile, the subsidies are to be delivered through social protection schemes.

(Source: The Star)

• TAGS:
• Blanket Fuel Subsidy
• Central Database Hub (Padu)
• Diesel Subsidy
• Fuel Subsidy
• Petrol Subsidy
• Rafizi Ramli
• Subsidy
• Subsidy rationalisation