Rm2 5b Saved Better Than Nothing Govt Defends Fuel Subsidy S No Income Cap

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Finance Minister II Amir Hamzah Azizan has defended Putrajaya’s decision to provide RON95 subsidies for all Malaysians, regardless of income, despite a cut to projected savings.
The minister emphasised that the estimated RM2.5 billion to RM4 billion in savings under the Budi95 plan should not be dismissed as “chump change”.
“To me, at this point in time, every single ringgit saved is worth it because it’s money that we can use for other needs.
“We either reduce the amount of deficit that we have, or we invest that into things that are necessary for (the nation’s) recovery,” Amir told a media briefing in Shah Alam today.
He added that the potential savings under the upcoming subsidy plan, while lower than earlier projected values, are better than the government not gaining at all.
“If we get RM2.5 billion (or) RM4 billion, I’ll be very happy, compared to not getting anything at all,” he said.
Up until August, the government had maintained that estimated savings from targeted RON95 subsidies would be up to RM8 billion.
However, Amir said yesterday that the new projected savings under the Budi95 plan are between RM2.5 billion and RM4 billion annually, subject to the price of crude oil.
The updated estimate is based on crude oil trading at around US$75 (RM315) per barrel. This is around the same estimate that the government had when it first came up with the original RM8 billion target in Budget 2025.
Prime Minister Anwar Ibrahim, in unveiling the new subsidy scheme yesterday, justified the shift as a recognition of the contributions of all Malaysians.
The prime minister previously said that the “mahakaya” (rich elites) would not be entitled to fuel subsidies.
Cutting out leakages
Asked about the subsidy also covering the top 15 percent of income earners, Amir, who is also carrying out the duties of the economy minister, said today that the government considered various issues faced by the people.
“It’s important that when (the government makes changes), the changes must be easily acceptable to society, and it also needs to reflect the condition at this particular time.
“The government understands that there are still pressures on the cost of living, so at this juncture, what we want to do is to cut out the leakages that occur in sectors that we deem as not eligible for subsidy,” he said.
Pointing out how non-citizens will not be eligible under the new scheme, Amir said this is meant to reduce the risk of smuggling.
“Even if they smuggle (petrol), they will be buying it at market price - at least there’s no burden on subsidies (provided by the government).
“Existing controls are also still in place, whereby foreign-registered vehicles are not allowed to buy RON95 as they instead have to buy RON97,” he said.
He admitted that while there was a “trade-off” in finalising the RON95 subsidy scheme, the government wished to listen to the people’s grouses and respect their tribulations.
Using data from Padu
Commenting on the government’s Central Database Hub (Padu), Amir said that while the system is “rich in data”, the Budi95 plan did not require much of its input.
“But, for Budi95, our criteria are simple - a person must be a Malaysian citizen, which is data that is best drawn from the National Registration Department.
“So, we don’t require the full complexity of the Padu dataset and don’t have to depend on it 100 percent,” he added.
He insisted, however, that the government utilises Padu in other ways, particularly when it comes to formulating policies.
“I didn’t say that we don’t use Padu - the Finance Ministry has been working with it to validate and cross-check the data that we have.
“We also have requests from some agencies for data analytics,” he added.
Earlier this month, before the government decided on blanket RON95 subsidies for all Malaysians, Amir said information in Padu would be used to cross-reference data from government agencies to determine the criteria and eligibility of subsidy recipients. - Mkini

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