Gov’t should postpone implementation of RON 95 targeted subsidy, electricity tariff hike – Hamzah

The government has been urged by lawmakers to postpone its plans to introduce RON 95 subsidy rationalisation and other fiscal reforms such as the move to increase electricity tariffs given the uncertainty in the global economy, The Star reports.

Bersatu deputy president Datuk Seri Hamzah Zainudin said that any policy changes, especially fiscal measures that could put pressure on costs, weaken business sentiment and ultimately burden consumers should be deferred for the time being.

“The rationalisation of RON95 subsidies in June this year should be put on hold, if possible, and the same goes for the hike in electricity tariffs in July,” he said in parliament.

Bagan MP Lim Guan Eng voiced a similar tone, saying that the floating of RON 95 prices to match market rates should also be delayed, as should the hike in electricity tariffs. He added that the recent announcement to defer the expansion of the sales and services tax (SST) scope from May 1 was a welcome move.

The government is scheduled to introduce targeted RON 95 subsidies in the middle of the year, but there has been a lack of clarity so far over the implementation mechanism that will be used. Up to March, the government had yet to define how it would establish eligibility for targeted subsidies as well as define a mechanism despite having reviewed four proposals.

However, that same month, finance minister II Datuk Seri Amir Hamzah Azizan said that the mechanism would be based on a two-tier pricing system with both subsidised and non-subsidised prices, with MyKad determining things.

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