PUTRAJAYA: The government is capable of providing fuel subsidies even if prices increase above the ceiling price capped by the Cabinet, and there is no need for a supplementary budget to do this, Finance Minister Lim Guan Eng said today.
Lim pointed out that the government has already made savings in other areas to cushion the cost and is expected to make more in the future, through good governance based on CAT (competence, accountability and transparency).
“I think we can afford (to bear the cost of the subsidy) because if you look at our performance, we have been making savings,” he told a press conference after a RM5 million cheque presentation to Yayasan Restu for printing of copies of Al-Quran, here today.
“It is also because of theses (savings) that the government is able to announce the Cost of Living Aid (BSH) for B40 families, single individuals and university students.
“All of these come from savings that we are also expected to make (in the future). If we make savings, of course we’ll share with the rakyat, and this (fuel subsidy and BSH) is part of it.”
Lim had yesterday announced that the retail price of RON95 would be capped at RM2.08 per litre, down from the previous RM2.20 per litre.
This meant that even if world oil prices were to increase, consumers would still only need to pay RM2.08 per litre, with the rest of the cost to be subsidised by the government.
The Cabinet has also previously capped the ceiling price of diesel at RM2.18 per litre. This price cap would maintain until the government introduces a targeted fuel subsidy mechanism later this year.
Asked how much the government is expected to spend on the subsidies, Lim said it was difficult to predict as it would depend on the global crude oil prices.
More to Follow
