KUALA LUMPUR, June 9 — The government’s commitment to continue bearing the cost of fuel subsidies is seen as helping the people and curbing inflationary pressures, while serving as the country’s main shield against the impact of the global supply crisis.

Federation of Malaysian Consumers Associations (Fomca) chief executive officer Dr Saravanan Thambirajah said the organisation welcomed the government’s initiative as it gives consumers confidence that the people’s welfare remains a priority.

He said maintaining fuel prices at current levels greatly helps reduce transportation and logistics cost pressures, while also supporting the supply chain to prevent increases in the prices of daily necessities.

“However, Fomca is of the view that fuel prices are not the only factor determining the prices of goods.

“Consumers still face challenges from food costs, rental rates, energy costs, wages and various other operating expenses that also influence market prices. Nevertheless, maintaining the RON95 price can act as a buffer against inflation,” he told Bernama.

Meanwhile, senior lecturer at the Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, Dr Mohd Shukor Harun, viewed the government’s commitment as a responsible measure, particularly in easing the financial burden of the B40 and M40 groups.

“However, from a public policy perspective, the existing blanket subsidy mechanism is regressive because it also benefits the wealthy.

“If this subsidy is maintained when global crude oil prices surge, the country’s fiscal deficit will widen and the expenditure will consume funds that should otherwise be channelled to development, education and healthcare sectors,” he said.

In this regard, he proposed a more sustainable long-term strategy to ensure continued assistance for the people in facing global economic pressures, including the progressive implementation of targeted subsidies.

For food delivery rider Umair Al-Anshaari Rusli, 24, the government’s move to maintain the subsidy is a great help as he relies entirely on his vehicle to earn a daily income.

“This fuel subsidy is important because it can help control increases in the prices of goods and transportation costs, as we depend heavily on motorcycles or cars to earn a living,” he said.

Prime Minister Datuk Seri Anwar Ibrahim previously said he did not agree with raising fuel prices while the country was facing a global supply crisis, and stressed that the government would continue efforts to bear fuel subsidy costs by allocating substantial monthly expenditure to prevent the people from being burdened. — Bernama