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Strong ringgit may delay RON95 subsidy cut – Rafizi

Strong ringgit may delay RON95 subsidy cut – Rafizi

It has been ventured that more details on the RON 95 petrol subsidy rationalisation will be revealed in the upcoming tabling of Budget 2025 this Friday, but the news surrounding that may be different than anticipated, with the latest pointers being that the implementation may be delayed because of improvements to the country’s economy.

This was indicated by economy minister Rafizi Ramli, who said Malaysia’s better-than-expected economic growth and the strengthening of the ringgit has provided the government improved flexibility to achieve its fiscal consolidation targets, essentially paving the way for the implementation of RON 95 subsidy rationalisation to be put aside for the time being.

Asked by reporters on whether the plan to pull back the blanket RON 95 subsidy will be announced in Budget 2025, Rafizi said it was best to wait for the budget announcement and “subsequently the months after that, because certain things have changed,” The Edge reports.

Strong ringgit may delay RON95 subsidy cut – Rafizi

Rafizi said that with higher economic growth, the country had slightly more room to navigate to meet its fiscal glide target. ““The strengthening of the ringgit also means less pressure on subsidy bills. My view is that so long as this government has more options to navigate, then we will be able to balance these competing priorities better, while at the same time, we will move closer to the fiscal consolidation target,” he said

“The ultimate objective is to make our public finance a lot more sustainable. And I think we have a few policy options that the government can adopt,” he added.

While there has yet been no indication as to when the subsidy rationalisation for RON 95 will be introduced, most research houses have projected that the implementation may take place in the second half of 2024. Back in July, prime minister Datuk Seri Anwar Ibrahim had indicated that there was no policy paper on it as yet, and that no plans were in the pipeline as the matter had not been discussed yet at that point.

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Anthony Lim

Anthony Lim believes that nothing is better than a good smoke and a car with character, with good handling aspects being top of the prize heap. Having spent more than a decade and a half with an English tabloid daily never being able to grasp the meaning of brevity or being succinct, he wags his tail furiously at the idea of waffling - in greater detail - about cars and all their intrinsic peculiarities here.

 

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