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Economist calls for clear communication plan to help Malaysians understand new targeted diesel subsidy

Publish date: Mon, 17 Jun 2024, 09:44 PM

KUALA LUMPUR, June 17 — The government need to craft a communication strategy so that the message on fuel subsidy rationalisation is be fully understood by all Malaysians, while showing where the savings from subsidy rationalisation will go to and the expected outcomes.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the communication has to be multilayered, in which the language has to be simple with less jargons, but focuses on the main message for the rural community.

“For those who highly educated, the explanation has to be data driven and fact-based. Indeed, it (fuel subsidy rationalisation) is a difficult decision but with the right communication strategy, the government can get a total buy-in from the citizens,” he explained.

At the same time, he said all Malaysians should be told the benefits and outcomes so that they understand why the difficult decision (fuel subsidy rationalisation) has to be made.

“Among the better outcomes that we could expect include better infrastructure in schools such as furniture, electrical appliances and science labs that will improve the learning experience among the students and helped motivate the teachers to be more effective in conducting lessons,” he said to Bernama when contacted today.

Quoting better healthcare services at public hospitals as the most crucial outcome, Afzanizam said it offers the most cost-effective services to all Malaysians and the savings from targeted subsidy can be rechannelled into this sector.

“All this will ultimately improve the country’s productivity as we are able to produce competent labour that are highly sought after by employers. Good health will also improve productivity while healthy workers mean they can work effectively and efficiently.

He added that monitoring and enforcement of existing laws are crucial to curb any diesel profiteering and malpractices among business operators.

As such, he commended the government’s constant and steadfast effort in combatting diesel smuggling while striving for a balance between the government’s efforts and keeping the cost of living down.

Prime Minister Datuk Seri Anwar Ibrahim today said the government still bears around RM7 billion in subsidies on diesel in Peninsular Malaysia.

He explained that subsidies were not abolished as the diesel subsidy rationalisation is to ensure more efficient management of subsidy so that they are not misused and reach the appropriate groups.

He also said savings from the implementation of targeted subsidy will certainly be returned to the people in the form of education, health, public transportation and other sectors that have the greatest impact on the public.

Meanwhile, Federation of Malaysian Consumers Association (Fomca) chief executive officer Saravanan Thambirajah said he hoped that more efficient targeting of the diesel subsidy could be implemented because many people were still confused about the aid.

According to him, many industries do not know whether they are eligible to receive subsidy and he hopes that the targeted diesel subsidy reaches those who are eligible, such as the B40 group and small traders in need of help.

On June 9, Finance Minister II Datuk Seri Amir Hamzah Azizan announced that the price of diesel at all retail stations in the peninsula will be set at RM3.35 per litre, which is the market price without subsidy based on the average of May 2024 according to automatic price mechanism starting on June 10.

He said the price setting and targeted implementation of diesel subsidy could provide savings of RM4 billion a year while also strengthening the country’s financial position in the long term.

Amir Hamzah said the new diesel price will be announced every week according to the current practice of the Ministry of Finance, and the government will continue to monitor the situation to avoid price instability.

However, the targeted diesel subsidy does not involve consumers in Sabah and Sarawak. — Bernama

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