Fuel subsidy is a complex challenge, says Anwar

According to Datuk Seri Anwar Ibrahim, the formulation and implementation of a targeted subsidy mechanism is a complex task that poses challenges.

While a team is currently working on it and some proposals have been made, there are concerns about its effectiveness due to its intricate nature.

According to The Star, Anwar explained that identifying the recipients of subsidies for electricity is relatively straightforward since houses and factories can be easily identified. However, when it comes to diesel subsidies, it becomes more complicated as it involves drivers who may use different vehicles or switch between small and expensive cars.

The objective of a targeted subsidy is to ensure that it benefits those who genuinely need it, rather than the affluent. Anwar highlighted that subsidies such as those for haj and electricity tend to benefit even the wealthy, whereas they should ideally be directed towards those who truly require assistance.

During a friendly session with traders, hawkers, and patrons recently, Anwar refrained from making specific promises about the timeline for implementing targeted subsidies but assured that the government was working diligently to expedite the process.

He acknowledged that it is a complex matter and emphasized that once the mechanism is ready, the government is eager to roll it out promptly.

Earlier this week, discussions between the Economy Ministry and the National Economic Action Council commenced to determine the type of aid that would be provided under the new targeted subsidy approach.

Deputy Finance Minister Datuk Seri Ahmad Maslan revealed that the implementation framework for targeted subsidies is currently 75 per cent complete. Notably, the government spent over RM50 billion on blanket fuel subsidies last year.