Rafizi: ‘Surprise’ announcement of subsidy rationalisation meant to prevent traders from hiking prices of goods

KUALA LUMPUR, July 11– Economy Minister Rafizi Ramli has today defended the sudden announcement of subsidy rationalisation, saying the move is needed to prevent traders from repeatedly hiking prices of goods.

He said any advance notice will result in traders taking advantage of the situation.

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“We have to balance the effect if the signal is given earlier, because the problem is that the increase in the price is set by the traders,” he said during the oral session in the Dewan Rakyat here.

“If, for example, it has been announced earlier, it will cause the increase in the price of the item to happen many times and that is why the government’s decision is better made when it has been completed at the government level.

“That will reduce the risk of the prices going up many times over,” he added.

On May 21, Prime Minister Datuk Seri Anwar Ibrahim announced today that the Cabinet has approved the start of the diesel subsidy rationalisation programme, which is expected to save the government around RM4 billion a year.

On June 9, Finance Minister II Datuk Seri Amir Hamzah Azizan announced that the price of diesel at all retail stations in the Peninsula would be set at RM3.35 per litre, which is the market price without subsidy, based on the May 2024 average according to the Automatic Pricing Mechanism formula starting the next day.

Last month, Anwar said the government has yet to make any decision on the need to rationalise the RON95 petrol subsidy.

After Rafizi was criticised for joking that the RON95 subsidy rationalisation will come as another “surprise”, Anwar said the government is studying the effectiveness of the diesel subsidy move, adding that if any members of the public feel affected, they can appeal for subsidy assistance.

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