RM9.6b to maintain fuel prices last year
(The Sun) – KUALA LUMPUR (April 5, 2011): The government last year forked out RM9.6 billion in subsidy to maintain fuel prices.
Deputy Finance Minister Datuk Donald Lim Siang Chai said although there was no guarantee that the price of RON95 fuel will remain, the government is doing its best to keep the price low so that it will not burden the people.
“We all know by now that the global oil prices reached the record high of US$108 (RM327) per barrel. Therefore, it is not easy to guarantee that the fuel price of RON95 will remain low, but we have taken all the necessary steps to control the price,” said Lim.
He said this in reply to a supplementary question raised by Salahuddin Ayub (PAS-Kubang Kerian) who asked if the government will guarantee the minimum price for RON95 as the price for RON97 has increased tremendously since its prices were determined by a market float.
Last Friday, the pump price for RON97 petrol went up 20 sen a litre to RM2.70/litre.
Earlier, Datuk Bung Mokhtar Radin (BN-Kinabatangan) asked the ministry the total amount of subsidy the government has to bear to ensure the prices of controlled items remain low in the market and how much the government has saved from rationalisation of the subsidies.
Lim said the government has spent RM14.2 billion in subsidy as of last year alone to maintain the prices of controlled items.
He explained that 81% or RM11.5 billion of the subsidy has been spent to ensure the controlled goods remain under the market price.
“This includes RM9.6 billion for fuel subsidy, RM828 million for cooking oil subsidy scheme, RM708.2 million for sugar subsidy, RM287.9 million for rice subsidy and RM88.2 million for flour subsidy,” he said.
Lim said despite the cost, the government still managed to save RM750 million in 2010 since the rationalisation of the subsidies for fuel and sugar which came into force on July 16 last year.
“Similar programme was later implemented on Dec 4, 2010 on the two same items and the government has saved RM1.18 billion from this,” said Lim.
He added that the savings from the subsidies allows the government to channel it to education and health sectors under the National Key Results Area (NKRA).
