FOMCA Calls For Advance RON95 Targeted Petrol Subsidy Announcement

A consumer group is urging the government to announce early of its plans to implement the targeted subsidy for RON95 petrol. This, it claims, allows consumers to adjust to potential price increases. Conversely, an economist also warns that early announcements might trigger panic buying.

T. Saravanan, CEO of the Federation of Malaysian Consumers Associations (FOMCA), stated that prices will rise regardless of when the government makes the announcement. He adds that the timing of the announcement won’t prevent businesses from passing additional costs onto consumers.

Earlier this month Economy Minister Rafizi Ramli explained that delaying the announcement until the last minute was intended to keep goods prices under control, suggesting that early announcements might be exploited by traders to justify price hikes. However, Prime Minister Anwar Ibrahim later downplayed this, stating no decision had been made yet.

Former Deputy Minister Ong Kian Ming has spoken out and criticised Rafizi's statement that the government will not provide advance notice on decisions to remove blanket subsidies for RON95 petrol and replicate how the diesel subsidy removal was executed. He adds that this would likely provoke more public backlash.

Saravanan further argued that an early announcement would allow businesses to manage their costs and minimise the impact on consumer goods prices. This also enables consumers to plan for the long term and adjust to new prices, potentially leading to behavioural changes such as reduced petrol consumption or increased public transport use.

Meanwhile Carmelo Ferlito, CEO of the Center for Market Education, said he did not foresee significant consequences from a last-minute announcement of the targeted subsidy regime. He further emphasised the importance of the government disclosing the mechanism and support measures now to help households and businesses prepare. Providing an indicative timeline would also be beneficial, he added.

Source: FMT