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Targeted diesel subsidies will save govt RM4bil annually, says PM

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Prime Minister Anwar Ibrahim says the move is necessary to restructure the public financial system.

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Free Malaysia Today
Prime Minister Anwar Ibrahim said targeted fuel subsidies would not be withdrawn completely in the short-term, as some parties had tried to portray.

PETALING JAYA:
The government is expected to save around RM4 billion a year with targeted diesel subsidies, says Prime Minister Anwar Ibrahim.

Anwar, who is also the finance minister, said information on when the targeted subsidies would come into effect would be announced by the relevant ministry.

“It is important to emphasise that targeted fuel subsidies will not be a complete withdrawal (right away), as some parties had tried to portray,” he said, referring to fears that prices will suddenly leap.

“This measure is necessary to restructure the public financial system,” he said in a special address tonight.

Anwar added that, much like the targeted subsidies for water and electricity, most people would remain unaffected.

On May 14, Anwar reiterated the need to cut wasteful spending, including reducing excess subsidies, to trim government debt levels. However, he stopped short of committing to a timeline for ending fuel concessions.

Malaysia currently absorbs much of the cost of fuel and cooking oil for its population, a measure estimated to have cost RM81 billion last year.

Anwar has sought to replace broad subsidies with targeted assistance this year to help narrow the 2024 budget deficit to 4.3% of GDP from 5% in 2023.

Early in his term, Anwar pledged to improve Malaysia’s fiscal position and reduce government debt from the current level of more than 60% of GDP.

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