Putrajaya Chose Unity Over Rm8b Savings Says Anwar On Ron95 Subsidies

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Potential conflicts among differing earning groups were one of the reasons Putrajaya opted to provide RON95 subsidies for all Malaysians regardless of income, said Prime Minister Anwar Ibrahim.
The prime minister explained that while initial talks had projected that targeted RON95 subsidies would save the government up to RM8 billion, his administration was reluctant to take on an initiative that would cause friction among the rakyat.
“We felt that we could not start an initiative that could cause conflicts among (certain) groups, or one that would not have an effect in terms of oil prices and the prices of goods.
“After considerations, we made a shift from initial proposals, for example (those involving) Padu (the government’s Central Database Hub) and so forth (as) they would cause a lot of unease,” Anwar said during his monthly assembly with Finance Ministry staffers today.
He also implied that under such income-based proposals, certain families might unjustly lose out on the benefits of RON95 petrol subsidies.
“Under previous suggestions, some (households) might get RM15,000, RM30,000 or RM18,000 - that would create a lot of complications, (as) they have RM18,000, but six children, and out of those six children, three are in universities,” he said.
“When we take into account all of this, denying them fuel subsidies or a reduction in fuel prices would cause unease.
“As long as we can save on subsidy expenditures, I think that is reasonable,” added Anwar, who is also the finance minister.
Recognising rakyat’s contributions
Prior to revealing the current fuel subsidy plan, dubbed Budi95, Anwar had previously maintained that the “mahakaya” (rich elites) would not be entitled to fuel subsidies.
In justifying the shift, however, he said that the blanket subsidy for all Malaysians is a recognition of the rakyat’s contributions.
Earlier this week, Finance Minister II Amir Hamzah Azizan similarly defended Putrajaya’s decision to subsidise RON95 petrol for all Malaysians, regardless of income, despite a cut to projected savings.
The minister noted that potential savings under the upcoming subsidy plan - estimated between RM2.5 billion and RM4 billion - while lower than earlier projected values, are better than the government not gaining at all.
Yesterday, Anwar’s political secretary, Kamil Abdul Munim, who serves him in the Finance Ministry, said the top 15 percent (T15) income group may lose access to the RON95 fuel subsidy in the next phase.
Good governance
Anwar said today that the government’s ability to implement the Budi95 programme is due to its policy on good governance and systemic reforms that have aided in curbing leakages and corruption.
He asserted that not all nations are able to sustain targeted subsidies as such an initiative hinges on financial discipline, transparency, and proper expenditure control.
“If we look at oil-producing countries like Saudi Arabia, fuel prices there are now much higher than in Malaysia. So, how are we able to provide subsidies? This is because of our good governance,” he said.
Referencing previous tribulations with the one-off RM100 Rahmah Necessities Aid (Sara), which saw the system collapsing under heavy usage, Anwar also assured that the Budi95 system has been built to handle higher traffic.
The Budi95 system, he said, is able to handle about 30,000 transactions per minute - over 10 times the capacity of the Sara platform.
Under Budi95, all Malaysians with a valid driving licence can buy RON95 at RM1.99 per litre, with a monthly limit of 300 litres. Anwar previously said e-hailing drivers can apply for a higher ceiling.
Foreigners driving locally registered vehicles are to pay the market price for RON95, estimated to be around RM2.60 per litre, while foreign-registered vehicles will still be limited to RON97.
The scheme is scheduled to be implemented in stages, with the armed forces and police first to get the subsidies on Sept 27, followed by Sara recipients on Sept 28, before a full rollout on Sept 30. - Mkini

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