Any adjustment of RON 95 petrol subsidies will be a last resort due to its direct impact on household spending, according to prime minister’s office senior economic and finance adviser Nurhisham Hussein, reported New Straits Times. The government currently has several policy options available, but it is proceeding cautiously given the sensitivity around fuel prices and cost-of-living pressures, Nurhisham said on the Keluar Sekejap podcast hosted by Khairy Jamaluddin and Shahril Hamdan. Among the policy options available to the government is to increase the price of subsidised RON 95 petrol from the present RM1.99 per litre, or further reducing the monthly quota for the fuel at the subsidised rate, which was “a last option”, Nurhisham said. “Petrol is a very sensitive issue and it has a direct impact on the rakyat’s pockets.Even if there is a petrol subsidy adjustment, it will be pushed back later,” he said on the podcast. While fuel prices had eased for now – this week’s fuel price update saw diesel drop by 10 sen and RON 95 petrol drop by 15 sen – the outlook for the global oil market remained uncertain, especially for the third quarter of the year, the adviser said. The temporary calming of markets was attributed to reduced fuel imports by China for the time being, and the increased output by major oil-producing countries, however ” at some point you cannot rely on reserves forever. China will start importing again and countries will also need to rebuild strategic reserves,” he said. Nurhisham warned that analysts were already expecting July and August to become “very uncomfortable” periods for oil markets due to renewed demand and ongoing supply shortages, saying that “the market is too optimistic” at this point and there was no guarantee fuel prices would remain stable between July and September. In terms of fuel consumption trends, government data showed that usage had increased slightly even after flexible work arrangements were introduced in the public sector. “We are still trying to figure out why. People may save during the work week but travel more during weekends or long holidays,” Nurhisham said. Meanwhile, efforts are ongoing towards tightening the subsidised diesel control system (SKDS) particularly for the logistics sector, as the government had previously allocated excessive diesel subsidies under the programme, said Nurhisham. “We gave too much when we started SKDS. Now we are tightening it to create savings because we now have enough data to understand better,” he said. Looking to sell your car? Sell it with Carro. Use the promo code 'PAULTAN' when you checkout for 10% discount!
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