ALOR STAR: The Consumers Association of Kedah has voiced concern about the domino effect of withdrawing fuel subsidies on the economy and people's livelihood.
Its president, Yusrizal Yusoff, said the government's decision to withdraw subsidies for petrol and diesel could lead to increased prices for goods and services, which will further raise the cost of living.
Yusrizal said while his association welcomed the government's initiative to develop the Central Database Hub (Padu) for direct subsidy distribution to target groups, the removal of fuel subsidies would likely force businesses to increase prices for goods and services.
"The withdrawal of fuel subsidies will inevitably trigger a domino effect on the economy and the prices of essential items.
"We expect a surge in the prices of goods and services, leading to a higher cost of living for the people," he said when contacted.
"It is almost certain that they will transfer the costs to consumers, which, in the end, will burden the people.
"The subsidies are helping manufacturers and businesses in maintaining the prices of goods and services.
He said even if fuel subsidies are withdrawn in stages, it will still burden the people.
Yusrizal also raised concerns about whether the government had any actual data on the average fuel consumption among Malaysians.
He said rather than withdrawing subsidies, the government should focus on revitalising the economy to recover from the downturn caused by the Covid-19 pandemic.
Yusrizal was responding to calls by economists for the government to phase out fuel subsidies gradually, as petrol and diesel accounted for the largest portion of the country's high subsidies bill.
Economy Minister Rafizi Ramli recently reaffirmed the government's intention to push ahead with its plans to reduce petrol subsidies this year to address its fiscal deficit.
He also highlighted plans to gradually phase out blanket subsidies for RON95 fuel, which consumed a significant portion of last year's subsidy budget.
The government has said that money saved from subsidies, the bulk of which are enjoyed by the rich, will be channelled towards aid programmes for the needy. `
Hauliers will also still be able to enjoy subsidised fuel with a Fleet Card, reducing impact of the rationalisation on their operations.