Last minute announcement of subsidy rationalisation to prevent traders increasing price many times – Rafizi

Last minute announcement of subsidy rationalisation to prevent traders increasing price many times – Rafizi

The government’s practice of last minute or sudden announcements when it comes to subsidy rationalisation is to prevent traders from hiking prices of goods ‘many times over’, economy minister Rafizi Ramli said. Conversely, any advance notice will result in traders taking advantage of the situation, he added.

“We have to balance the effect if the signal is given earlier, because the problem is that the increase in the price is set by the traders. If, for example, it has been announced earlier, it will cause the increase in the price of the item to happen many times and that is why the government’s decision is better made when it has been completed at the government level,” Rafizi told parliament today, reported by Malay Mail.

“That will reduce the risk of the prices going up many times over,” the Pandan MP said.

Rafizi was referring to the sudden announcement of the increase in diesel pump prices, as part of the diesel subsidy rationalisation programme. On May 21, PM Datuk Seri Anwar Ibrahim announced that the cabinet has approved the programme, which is expected to save the government around RM4 billion a year.

Last minute announcement of subsidy rationalisation to prevent traders increasing price many times – Rafizi

The PM did not mention dates, but on June 9, finance minister II Datuk Seri Amir Hamzah Azizan announced that the pump price of diesel in Peninsula Malaysia would go up by 56% to RM3.35 per litre on June 10.

Expect the same pattern of announcement for the removal of blanket subsidy for RON 95 petrol, which is expected by many to happen this year.

Last month, when asked if the move will be implemented this year with a pre-announced timetable, Rafizi said that the government is keeping its cards close to its chest in the same way it did with diesel. “We did surprise everyone with diesel, and I think everyone is up for another surprise,” he told Bloomberg on the sidelines of the World Economic Forum’s summer gathering in Dalian, China.

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