DPM: We cannot sustain subsidies on the same amount

Earlier this month, RON 97 petrol shot up by 20 sen to RM2.90 per litre. It was actually the fifth monthly increase in a row for RON 97 since December 2010, but it does not affect the majority of Malaysians, who continue to pay RM1.90 for RON 95 fuel. But will there be an upward revision of RON 95 prices?

Not today, but we should brace ourselves for one. Deputy Prime Minister Tan Sri Muhyiddin Yassin told reporters this morning that the subsidy bill is set to double to RM20.58 billion, and that the country will not be able to sustain this level of subsidy at today’s prices. Of this total, petroleum related sectors, including subsidy for RON 95 petrol and diesel, takes the lion’s share of RM18 billion. Last year, it cost RM9.2 billion.

“Yes, we are subsidising but we cannot sustain subsidies on the same amount. So there are ways in which we are trying to reduce subsidy costs like the increase in price of sugar. We are doing it in stages. Subsidy costs has also doubled from RM10.32 billion in 2010 to an expected cost of RM20.58 billion in 2011. RM18 billion is subsidy for petroleum-related sectors,” he told newsmen.

“We cannot guarantee there will be no increase in the prices of goods. We cannot control the prices but where the government can intervene to decrease public burden then we will,” the DPM added.

© 2011 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Wed, 18 May 11 00:31:45 +0000.

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