Malaysia to cut down on petrol subsidies this year

 Malaysian Economy Minister Rafizi Ramli (Photo: malaymail.com)

Kuala Lumpur (VNA) - Malaysian Economy Minister Rafizi Ramli has announced that the country will reduce petrol subsidies this year to reduce its fiscal deficit.

The minister revealed that the government is currently on track to concentrate its aid on helping the poor and “manage the sequence” of the reduction.

Malaysia's MYR hit near its lowest level in 26 years since the 1998 Asian financial crisis. The currency has depreciated by about 4% since the start of 2024 and was hovering near its lowest level since the Asian financial crisis of 1998.

Malaysia is currently subsidising most of its fuel and cooking oil prices, putting a strain on the Southeast Asian nation's budget. The government plans to narrow the budget deficit from 5% of GDP in 2023 to 4.3% this year. If successful, the government will save up to 2 billion USD a year and switch to direct distribution to the poor.

The country intended to phase out blanket subsidies for RON95 fuel, which is the most widely used and economical gasoline variant, which constituted the majority of the 81 billion MYR (16.9 billion USD) spent on subsidies last year./.