Call to review the fuel subsidy scheme

The subsidy rationalization policy should be reviewed as the planned withdrawal of petrol subsidy for T15 households will lead to higher cost of living and inflation due to its ripple effect on the economy, says Tan Sri Muhyiddin Yassin.

Calling on the government to review its proposed plan announced in the 2025 budget, the Pagoh MP said inflation was expected to rise between 2% and 3.5% next year.

He also questioned the decision on withdrawal of petrol subsidy, noting that the T15 group or the top 15% income group has not yet been clearly defined.

“Husbands and wives earning RM7,000 a month can end up in the T15 group.

“It will be unfair to classify these families as ‘ultra rich’ when their disposable income will be affected by home and car loans, including their children’s education fees,” he said while taking part in the debate on the 2025 Budget.

In 2022, the Department of Statistics defined the T15 group as those with a household income of at least RM13,295.

Under Budget 2025, under-15s will no longer be eligible for health, education and fuel subsidies.

Muhyiddin added that the minimum wage of RM1,700 next year would also mean a higher cost of living for consumers.

He said this was because employers, including smaller businesses, would eventually pass on the higher cost of operations to consumers.

“There are clear policies and actions to control the prices of goods if there is a wage increase next year,” he said.

He suggested that the government create a special Food Fund to address the rising cost of food that will affect the poor and those in the lower income group.

The Pagoh MP said instead of making sweet talks, the government should ensure that its promises are fulfilled.

“The other side has made a lot of public announcements, but they were not implemented or otherwise done.

“This has raised questions as to whether the Madani government will deliver on its promises,” he said referring to the rising cost of living affecting the population, despite foreign investments reaching RM160 billion, with an economy growing at 5.9% and inflation at 1.9%.

He said despite the positive economic indicators, studies conducted by independent think tanks show the opposite regarding the reality on the ground.

He cited a study by the Malaysian Institute of Economic Research, which found that 72% of respondents were significantly affected by the rising cost of living and most of them were forced to reduce their their daily expenses.