Govt ready to pay RM45bil a year to absorb fuel subsidy costs

Prime Minister Anwar Ibrahim affirmed the government's dedication to maintaining RON95 petrol prices at RM1.99 per litre, despite international crude oil prices soaring to between US$120 and US$130 a barrel. The government is ready to shoulder an annual fuel subsidy cost increase of up to RM45 billion to shield the public, especially low and middle-income groups, from the adverse effects of rising global fuel prices.

If oil prices continue to escalate, the government could face expenses ranging from RM42 billion to RM45 billion each year. If fuel prices were aligned with market rates, individuals would have to contribute an extra RM2 to RM3, or possibly RM5 daily. For those juggling work and childcare, this equates to a potential additional RM10 daily expense.

Anwar asserted that it is more prudent for the government to bear this burden rather than pass the cost onto consumers. Despite a near-doubling of global crude oil prices from around US$70 a barrel previously, placing many nations under significant cost-of-living pressures, the government opted to absorb a large share of fuel subsidy costs.

Anwar also dismissed the notion that substantial subsidies fostered excessive dependency on government aid, emphasizing that policies must consider the challenges faced by low-income households. The government's strategy aims to strike a balance between stimulating economic growth and ensuring that national progress translates into a higher standard of living and improved wellbeing for the populace.