KUALA LUMPUR, Nov 21 — Opposition leaders have hit out at the rolling back of subsidies on RON95 fuel and diesel as “irresponsible” and “too drastic”.
PKR secretary-general Rafizi Ramli said that for decades Malaysia has been able to share part of its oil wealth with its citizens through a system of subsidised fuel, adding that part of the oil wealth flowed to the people directly and that they did not have to wait for the government to make allocations.
“The issue of petrol and diesel subsidies in this country should not be to the decided by whether the subsidies are good or bad for the economy.
“The bigger principle is whether the wealth from oil and gas found in this country is shared with the people, and not just spent arbitrarily by the government.
“With the scrapping of petrol and diesel subsidies, all of the oil and gas revenue would be monopolised by Barisan Nasional. They can just decide how much of the allocation goes to the people,” he said in a statement today.
The Pandan MP who was previously a senior manager at Petronas, Malaysia’s state-owned oil company, said Putrajaya’s latest move showed that Prime Minister Datuk Seri Najib Razak did not intend to get rid of corruption and that the oil and gas revenue would be used to “finance all the waste and corruption that is rampant in Datuk Seri Najib Razak’s administration”.
PAS’s Dr Dzulkefly Ahmad meanwhile said the all-out removal of subsidy is “too drastic” and that it was “very negative and inconsiderate” and would trigger immediate inflationary pressure.
He said though the best time to let market forces determine the price of oil would be when prices are low, around the US$75 per barrel level, at which no government subsidy would have be needed.
“Timing wise, it couldn’t have come at a worse time amid the recent hike of power tariff, petrol price and the impending imposition of GST,” he told Malay Mail Online via text.
Both Dr Dzulkefly and Rafizi suggested that there should instead be a controlled ceiling price and petrol companies should be allowed to set their own pricing accordingly, and compete among themselves.
“It also provides an incentive for oil companies to be more efficient and not just rely on government protection through uniform price as it is now,” Rafizi said.
PKR’s Batu Uban assemblyman Dr T Jayabalan, who has some experience in consumer issues, said the absence of subsidy for RON95 will be “tremendous especially for those on two-wheelers”.
“A lot of people in the small villages, rural and urban poor depend on motorcycles to move around.
“The increase will led to a shrinking disposable income,” he told Malay Mail Online, lamenting the move.
Putrajaya announced today that it will stop providing any subsidy for RON95 petrol and diesel from next month onwards and the price for these two fuels will be set using the managed float mechanism from December 1.
Today’s abrupt announcement will see an end to the federal government footing the bill to allow Malaysians to pay cheaper rates for RON95 petrol and diesel, regardless of the market price.
It also comes after the federal government slashed the subsidy for RON95 petrol and diesel twice in recent months.
The RON97 petrol has already been put on the managed float system since July 2010 and is not subsidised by the government.