KUALA LUMPUR – Malaysian Prime Minister Anwar Ibrahim on May 5 said his Cabinet has not made any final decision on a removal of fuel subsidies, in response to a Straits Times report that this assistance would be cut by June.
“The issue of withdrawing diesel subsidy, although there was initial discussion, there was no final decision regarding the implementation date,” he told reporters.
“The method needs to be explained. The principle is that it does not burden the people,” he was quoted as saying by Bernama news agency.
Communications Minister Fahmi Fadzil said on May 4 that the Cabinet had yet to discuss the issue.
“So do not put the cart before the horse. Don’t announce before it has been announced. Or rather, don’t report before it has been announced. I see that several foreign-based media outlets have pre-empted the process,” he added.
“I hope all parties, including the media, can obtain information from credible sources,” he said.
ST reported on May 3 that Malaysia is set to cut fuel subsidies by June, a major economic reform that will be a key test of support for the Pakatan Harapan-led unity government as the public grapples with high costs of living.
Official and industry sources told ST that diesel prices will float to market rates after the Kuala Kubu Baharu by-election on May 11.
This will be followed by a staggered rise in retail rates of petrol.
Deputy Minister for Domestic Trade and Cost of Living, Ms Fuziah Salleh, on May 4 described the ST report as “baseless”.
“I hope no one tries to get ahead of the government on this matter because such a statement could create panic among the people although it is baseless,” she was quoted as saying by the online Malaysiakini news website.
“Please wait for the government’s announcement. In the event that the targeted subsidies mechanism is executed, the government will ensure that it won’t burden the people,” she added.
The subsidy cuts are part of economic reforms announced by Datuk Seri Anwar in October 2023 when tabling the 2024 Budget.
Malaysia’s richest benefited more from subsidies than the poor, he said then.
Annual fuel subsidies have regularly breached RM50 billion (S$14.3 billion) in recent years, making up the bulk of Kuala Lumpur’s total subsidy bill – which is estimated to reach RM81 billion for 2023 and also covers electricity and basic food items.
