Subsidy cuts by the government could face potential backlash although PM Anwar Ibrahim has assured that all steps to cut fuel subsidies in the future would not “punish” the poor.
Is there a possibility of the move by PMX cause a political blowback and led to electoral losses?
Inflation is expected to tick up following the removal of blanket subsidies.
Those in the T20 group will no longer be able to reap benefits meant for lower and middle income earners with the implementation of targeted fuel subsidies.
The government has cut diesel subsidies and float retail prices to the market rate of RM3.35 per litre, an increase of about 55 per cent from RM2.15, starting from today, June 10.
Until PKR and PH win a legacy for themselves, they can never be sure of their place in Malaysian politics.
This includes 10 types of public transport vehicles and 23 types of goods transport vehicles under the Subsidised Diesel Control System, including buses and taxis.
Nevertheless, Malaysia’s fuel prices are among the cheapest in the world because of the government subsidy.
The plan is risky for Anwar, who took power in 2022, as it may anger working-class voters struggling with rising cost of living.
The move may cause averse political ramifications for Prime Minister Anwar Ibrahim’s ruling Pakatan Harapan government.
Its diesel subsidy bill alone has risen 10-fold from 1.4 billion ringgit in 2019 to 14.3 billion ringgit in 2023.
The government is expected to save about 4 billion ringgit ($853.24 million) annually, with the savings expected to be re-directed to low-income groups.
-Jeffrey Soo
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