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Sunday, February 12, 2017

Johari: No need for subsidy mechanism at current fuel prices

While the government is considering ways to provide aid for the poor should fuel prices go up, this is currently unnecessary.

This is because the current prices of between US$45 and US$55 a barrel are still reasonable, said Finance Minister II Johari Abdul Ghani, but it would be a different story if the prices are much higher.

“There is no mechanism yet. We are considering to see how it goes, but so far I think there is no necessity at this stage for us to change.

“If the fuel prices return to US$100 per barrel prices, for example, then we may need this (mechanism). 
"At around US$55 or US$54, it is still very reasonable,” he told reporters when met in Cheras today.
Brent crude oil prices currently stand at US$55.70 per barrel, according to Bloomberg.
Elaborating on the aid scheme, Johari said one possibility is to increase the Bantuan Rakyat 1Malaysia (BR1M) cash aid, using the surplus in government funds due to high oil prices.

Last week, Bernama had quoted Johari saying that the government is considering changes to Malaysia’s fuel pricing mechanism, including allowing petrol dealers to sell at any price below a set ceiling price, and aid for the poor in the event of high fuel prices.
“We are aware of the oil prices. We will monitor them. If they keep on increasing and if there is additional revenue, I think the government can consider a different form of assistance to the lower-income groups, but not those who are well off,” he was quoted as saying.
However, the previous practice of providing untargeted fuel subsidies have been ruled out.- Mkini

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