Move to rationalise diesel subsidies on hold, but will be announced when the time is right – Rafizi Ramli

The government says that the planned rationalisation of diesel subsidies is currently on hold, but will be announced when the time is right. According to economy minister Rafizi Ramli, the reason why the government is keeping its cards close to its chest is to avoid speculative inflation from happening as much as it can, as The Star reports.

He said that while data from the Pangkalan Data Utama (PADU) socio-economic database is ready, the timeline for rationalisation hasn’t yet been indicated because there were concerns that certain groups would take advantage of the situation by raising prices for profit should disclosure come about too early.

He said one of the main considerations was the need for proper sequencing to be done in implementing the diesel subsidy rationalisation to ensure there is a balance between wage growth, increasing public income and inflation, and this would take time.

Nevertheless, he said that rationalisation will eventually come about once the government is ready and an appropriate mechanism has been decided on. “(It will happen) because a lot of work, discussion and coordination has been done,” he said.

The government has previously outlined plans to introduce a targeted subsidy mechanism for both diesel and RON 95 petrol, with that for the latter slated to be sometime in the second half of 2024. However, it has yet to announce the mechanism and how these subsidies will be dispensed.

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