ALOR STAR: The Consumers Association of Kedah has voiced its concern about the domino effect of withdrawing fuel subsidies on the economy and people's livelihood.

Its president, Yusrizal Yusoff, said the government's decision to withdraw subsidies for petrol and diesel could lead to increased prices for goods and services, which will further raise the cost of living.

Yusrizal said while his association welcomed the government's initiative to develop the Central Database Hub for direct subsidy distribution to the target group, the removal of fuel subsidies would likely force businesses to increase prices for goods and services.

"The withdrawal of fuel subsidies will inevitably trigger a domino effect on the economy and the prices of essential items.

"We expect a surge in the prices of goods and services, leading to a higher cost of living for the people," he said when contacted.

In general, Yusrizal said, the public opposed the move as they were already burdened by the current fuel prices and high cost of living.

He added that business operators in the high-income group bracket might raise their prices for goods and services to offset the impact of fuel subsidy withdrawal.

"It is almost certain that they will transfer the costs to consumers, which, in the end, will burden the people.

"The subsidies are helping manufacturers and businesses in maintaining the prices of goods and services.

"Even if fuel subsidies are withdrawn in stages, it will still burden the people.

"The people are asking what happened to the promises made by the leaders regarding reducing fuel prices once they come into power."

Yusrizal also raised concerns about whether the government had any actual data on the average fuel consumption among Malaysians for proper direct subsidy channelling.

He said previous administrations had provided cash assistance to the target group, but they did not withdraw fuel subsidies.

Yusrizal added that as an oil-producing country, Malaysians were hoping that the government would retain fuel subsidies.

"It is the right of Malaysian citizens. People have been enjoying fuel subsidies and other subsidies for decades.

"Our rights as citizens will be denied despite our contributions to the country in our respective fields. If the government proceeds with the plan, it will likely lose support from the people as they will become frustrated."

He said rather than withdrawing subsidies, the government should focus on revitalising the economy to recover from the downturn caused by the Covid-19 pandemic.

Yusrizal was responding to calls by economists for the government to phase out fuel subsidies gradually, as petrol and diesel accounted for the largest portion of the country's high subsidies bill.

Economy Minister Rafizi Ramli recently reaffirmed the government's intention to push ahead with its plans to reduce petrol subsidies this year to address its fiscal deficit.

He also highlighted plans to gradually phase out blanket subsidies for RON95 fuel, which consumed a significant portion of last year's subsidy budget.

https://www.nst.com.my/news/nation/2024/04/1040083/fuel-subsidy-removal-will-trigger-domino-effect-economy-peoples