Deputy Finance Minister Datuk Chua Tee Yong said yesterday support for the government’s move had been received from the International Monetary Fund and the World Bank.
The support came even before the government had decided on the implementation mechanism for next year’s fuel subsidy rationalisation, he said.
Chua said the announcement of the mechanism used for fuel subsidy rationalisation would be made once the cabinet had given the green light.
It was important, he said, for it to be implemented because the government spent more than RM43 billion last year on subsidies.
“In the long run, the amount spent on subsidies is not feasible, especially when the money could be better used to develop the country,” said Chua.
Under the new mechanism, the purchase of RON95 petrol for those in the high-income bracket will be based on market price.
Low- and middle-income earners would continue to enjoy RON95 at subsidised prices.
At present, the price of RON95 is RM2.30 per litre.
The mechanism and implementation methods are being looked at by the Finance and Domestic Trade, Cooperatives and Consumerism ministries, as well as the Economic Planning Unit.
The petrol subsidy rationalisation could be done through the use of MyKad or other cards, as the government is still reviewing options.