Budget 2015: Govt to develop new mechanism for providing petrol subsidy soon
the government allocated more than RM21 billion annually to subsidise RON95 petrol, diesel and LPG cooking gas. - File pic
The government will develop a new mechanism for providing petroleum subsidy which will be announced soon, says Prime Minister Datuk Seri Najib Tun Razak.
The move is aimed at ensuring a more targeted subsidy and taking into account the rakyat's awareness and readiness to subsidy rationalisation.
Najib, who is also Finance Minister, said the government allocated more than RM21 billion annually to subsidise RON95 petrol, diesel and LPG cooking gas.
"The allocation for subsidies has increased 14 times from RM1.65 billion in 2002 to RM23.5 billion in 2013, solely to maintain low retail petrol price," he said when tabling the 2015 Budget, themed " People Economy" in the Dewan Rakyat here today.
The prime minister attributed the increased subsidies to the growth in the number of vehicles from 13.6 million units in 2008 to 23.7 million units in 2013.
Najib explained that the government had allocated RM588 million for various subsidies in 1994 and the amount has increased to RM40.5 billion in 2014.
"To improve the public finance, the government is committed to implementing subsidy rationalisation particularly for petroleum.
"The rationalsiation will ensure that the subsidy rationalisation is implemented in stages so that it does not burden the rakyat," he said.
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