Diesel subsidy rationalisation to be announced in due time, says Rafizi

A TIMELINE timeline for the rationalisation of diesel subsidies will be announced to avoid speculative inflation, said Economy Minister Rafizi Ramli.

This, reported The Star, was to avoid any speculative inflation.

“One of the main considerations for the diesel subsidy rationalisation is the sequencing, which is key in maintaining the balance between wage growth, putting money in the public’s pockets and inflation,” he said.

Although it was previously announced that the diesel subsidy rationalisation will happen this year, Rafizi said that it may take some time.

He said the final decision as to the best sequencing will be decided by the Cabinet and we are not at that stage yet.

Rafizi said the plan began with the Central Database Hub (Padu) and to ensure the data needed is readily available when the government wants to do something.

“The data is ready and it depends on what mechanisms the government wants to employ. 

We are trying our best to avoid inflation speculation,” he said.

Last month, Rafizi said the plan to remove blanket fuel subsidies this year is on track, and that the move would help reduce the national fiscal deficit.

The government needs to “manage the sequence” of subsidy cuts with the risk of inflation picking up even before they are implemented, he said in an interview with Bloomberg on Tuesday.

Last year, Rafizi announced the targeted RON95 subsidy programme in the second half of 2024 to optimise its resources for those that need them the most. 

He had said those in the top 20 (T20) income group were receiving 53% of blanket fuel subsidies, which was unsustainable and unequitable. – May 15, 2024