Announce targeted petrol subsidies early, says Fomca

 

A consumer group and an economist disagree over when the implementation of the targeted petrol subsidy for RON95 should be announced.

PETALING JAYA: 

A consumer group wants the government to announce early when it plans to implement the targeted subsidy for RON95 petrol to enable consumers to adjust to new and possibly higher prices.

On the other hand, an economist advises against it, saying an early announcement may cause panic buying.

T Saravanan, CEO of the Federation of Malaysian Consumers Associations (Fomca), said prices will rise no matter when the government makes the announcement.

As a result of the widespread discussions on targeted subsidies for petrol, businesses are already waiting in earnest for its implementation,

 he told FMT.

Whether (the government) announces it earlier or later, prices will definitely rise,

 he said.

Somehow or other, businesses will see additional costs and these will be transferred to consumers,

 he added.

Last week, economy minister Rafizi Ramli said the decision to delay the announcement to the last minute was to ensure that prices of goods remained 

under control

.

He said an early announcement could be used by traders as an excuse to launch a series of price increases.

When asked about the possibility of targeted subsidies for RON95 being rolled out this year, Rafizi said: 

I think everyone is up for another surprise

.

However, Prime Minister Anwar Ibrahim later played down those remarks, saying no decision has been made yet.

Saravanan said an early announcement will also give businesses time to manage their costs and minimise impact on prices of consumer goods.

At the same time, consumers can plan for the long term and adjust to the new prices,

 he added.

He said such a move could also lead to behavioural changes.

Consumers will be more mindful of how much petrol they use, which can lead to less travelling or increased use of public transport,

 he said.

Saravanan said consumers can report unjustified price increases to the domestic trade and cost of living ministry, which has the authority to investigate businesses for profiteering.

CEO of the Center for Market Education Carmelo Ferlito said he does not foresee any significant consequences from a last minute announcement of the implementation of the targeted subsidy regime.

However, the government should disclose the mechanism and support measures now. This will enable households and businesses to prepare and know what to expect,

 he told FMT.

It’s also helpful if the government can provide an indicative timeline,

 the economist added. - FMT