Move To Adjust BUDI95 Quota Temporarily A Reasonable Step To Reduce Subsidy Payout, Govt Spending
By Mikhail Raj Abdullah
KUALA LUMPUR, March 26 (Bernama) -- Malaysians should accept the government’s temporary adjustment of the monthly subsidised BUDI95 quota to 200 litres from 300 litres per month effective April, as a reasonable step to reduce fuel subsidy spending and one that is necessary due to escalating crude oil prices.
Nevertheless, the move to maintain BUDI95 quotas for e-hailing drivers and riders at 800 litres a month is also a far-sighted decision by the government to help a sector which serves as a backbone for daily urban mobility and comprises mostly people from the lower-income group.
The decision to maintain the price of RON95 petrol at RM1.99 per litre is also a well calculated move not to burden the people despite escalating crude oil prices globally.
As Prime Minister Datuk Seri Anwar Ibrahim explained, some 90 per cent of the people would not be affected by the streamlining of the quota.
This is because a majority of them utilise only 100 litres of their quota while close to 90 per cent use 200 litres.
This means the majority of consumers of RON95 would not be affected by the quota reduction.
Besides the government resorting to fiscal discipline, the rakyat should also do their part in undertaking belt-tightening measures.
This includes saving on fuel expenses, reducing unnecessary expenditure and working from home especially if crude oil prices continue to escalate further due to the fallout from the war in West Asia.
The people need to consider that neighbouring ASEAN countries such as the Philippines, Vietnam and Cambodia are facing severe economic strain as they are oil-consuming countries.
Sri Lanka has declared every Wednesday a holiday for public institutions to conserve fuel while Malaysia’s ASEAN neighbours have taken austerity measures such as shorter workweeks.
The prices of petrol, diesel and gasoline in all these countries and globally for that matter have also increased significantly.
The situation in Philippines, which imports almost 95 per cent of all its oil requirements, is significantly worse off, with the country in a state of national energy emergency.
To save on fuel, Malaysia too is considering reviving work-from-home (WFH) arrangements.
With Malaysia now being a net crude oil importer, it is imperative such steps are taken to cut government expenditure.
Last week, monthly government subsidies aimed at reducing the financial burden have risen from around RM700 million to RM3.2 billion in less than a week following the surge in global oil prices.
Higher crude oil prices would also exert inflationary pressure on food and transportation costs.
If prices of goods and services increase, it is imperative that consumers adopt more prudent spending habits.
As of today, Brent crude futures have risen to more than US$104 per barrel due to supply problems after the United States and Israel attacked Iran on Feb 28.
In retaliation, Iran has attacked military bases and oil installations and refineries across several Gulf countries allied with Washington.
Tehran has also locked down the Strait of Hormuz, a vital shipping lane which transports one-fifth of the world’s crude oil and liquefied natural gas supply.
It has choked off supplies to Asian countries including quite a number of oil-consuming nations in Southeast Asia.
Anwar said recently that nearly 50 per cent of Malaysia’s oil supply passes through the Strait of Hormuz.
Therefore, like many others, Malaysia is also vulnerable to disruptions to this shipping route as it imports more oil than it exports.
Against such a backdrop, Malaysians must also do their part to control finances and not depend excessively on the government for subsidies over the long term.
The time has come for the people to pull together with the government in the same direction to overcome the current oil crisis in all ways possible.
-- BERNAMA