Treasury: Putrajaya still paying a few hundred millions in fuel subsidies

Tan Sri Dr Mohd Irwan Serigar Abdullah, Secretary General of the Ministry of Finance giving the keynote address at the Post-Budget 2018 Dialogue at the Securities Commission of Malaysia in Kuala Lumpur, October 30, 2017. — Picture by Choo Choy May
Tan Sri Dr Mohd Irwan Serigar Abdullah, Secretary General of the Ministry of Finance giving the keynote address at the Post-Budget 2018 Dialogue at the Securities Commission of Malaysia in Kuala Lumpur, October 30, 2017. — Picture by Choo Choy May

KUALA LUMPUR, Oct 30 — The government still forks out a few hundred millions of ringgit monthly for fuel subsidies despite abolishing it in 2014, Treasury Secretary-General Tan Sri Irwan Serigar admitted today.

Speaking at the Post Budget 2018 Dialogue today, Irwan said the subsidy is sometimes made when fuel prices rises.

“Although we went through fuel price mechanism, government still subsidises sometimes. In certain period if it goes up, we subsidise a bit,” Irwan said, referring to fuel prices.

“We still subsidise a few hundred million a month, but I don’t know what will happen in the future. Formerly we subsidised RM22 billion, after rationalisation around hundreds of million.”

Irwan was answering a question from the floor regarding fuel pump price mechanism.

Malaysia began cutting back on subsidies under Prime Minister Datuk Seri Najib Razak on July 15, 2010 which impacted vehicle fuel, sugar, and cooking gas.

In 2014, the government withdrew subsidies for premium grade petrol RON97 while standardising the price in Sabah and Sarawak to protect the rural poor. By December 1 that year, Malaysia officially ended all fuel subsidies due to the low fuel price of the time.

Fuel pump prices had been left on a float according to the market since then.

Last year, Najib said Malaysia had spent RM29 billion to subsidise RON95, RON97 and diesel fuel in 2013 prior to the abolition.

Both Opposition pact Pakatan Harapan and Islamist party PAS had vowed to reintroduce fuel subsidies should they win federal power.

In the same dialogue, Irwan also said that the government is in the midst of setting up a task force to monitor and ensure that all projects announced in Budget 2018 will be completed in a cost-effective and timely manner.

“The chief secretary Tan Sri Ali Hamsa will chair the task force and I will be his deputy. Our duty is to ensure that all the projects announced in the budget will be on schedule and cost effective to ensure that it can create a better impact for the rakyat,” he said.

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