Kuala lumpur: The government has to allocate a subsidy of RM2 billion per month to maintain the price of RON95 petrol at RM1.99 per litre through the Budi MADANI RON95 initiative following the surge in world crude oil prices, said Prime Minister Datuk Seri Anwar Ibrahim. He said the price maintenance was expected to involve a total subsidy of RM24 billion per year to be borne by the government to ensure that the people are not burdened, given that world oil prices have now increased.
According to BERNAMA News Agency, the Prime Minister stated that apart from maintaining RON95 petrol among the cheapest in the world, the government would also continue to bear the diesel subsidy in Sabah and Sarawak, which was set at RM2.15 per litre compared to the actual cost of RM4.30 per litre. "Last year, the diesel subsidy for Sabah and Sarawak was RM2 billion. But so far this year after the war, the price soared and the government has to pay (an estimate if current prices remain) RM4.6 billion (per year) to cover the diesel subsidy in both states," he noted.
The Prime Minister further explained that the current surge in oil prices was caused by the geopolitical crisis in the Middle East. Malaysia, as an independent country, strongly opposes military intervention and attacks by Israel and the United States on Iran. "The tension has caused the closure of the Strait of Hormuz, which has resulted in international merchant ships being stranded, thus increasing the cost of transportation and insurance for the global supply chain," he said.
Despite facing external crises, the Prime Minister expressed gratitude that Malaysia remains peaceful and prosperous, serving as an example of a moderate country. He mentioned that leaders of other countries have contacted Malaysia to seek its views towards resolving the conflict. Meanwhile, the Prime Minister reminded the people to delve into the true meaning of the National Consumer Day celebration and the month of Ramadan by becoming smart consumers.
Anwar advised the public not to be easily influenced by advertisements that lead to excessive spending but instead to practice moderation and always be mindful to help the poor. He highlighted the warning of economists regarding the theory of conspicuous consumption, where consumers tend to buy unnecessary items beyond their means due to being mesmerised by marketing hype and sentiment, rather than the real needs of the family.
"The government is always active in utilising platforms such as National Consumer Day to educate and enlighten the public so that they are able to make rational assessments, thus choosing goods at lower costs but with good quality," he said.