by ANIS HAZIM / Pic by MUHD AMIN NAHARUL

THE government is testing a targeted subsidy mechanism for fuel, says Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz (picture).

However, he did not disclose the timeline to launch the mechanism as it needed to be presented to the Cabinet.

“This is something that the government wants to do and has been looking at. But, the cabinet will decide when it will happen,” he told reporters after launching the edotco Sustainability Blueprint and Report 2021 on Thursday.

The Finance Minister said the decision will only take place when the government is comfortable to execute the mechanism on the platform.

“We are looking at various platforms because, obviously, the users are different, so the customer experience will be very different between rural areas and the city,” he said.

According to him, the amount of the subsidies for this year was expected to reach RM77.7 billion, with fuel subsidy alone expected to reach RM30 billion. In May, the fuel subsidy had already reached RM5 billion.

Meanwhile, on the Bank Negara Malaysia (BNM)’s Monetary Policy Committee (MPC) decision to raise the overnight policy rate (OPR) to 2.25% yesterday, he said that the federal government does not have the authority to determine the rates.

“This decision has no interference by the federal government, this also includes previous decisions (of the OPR),” he said.

Nevertheless, he was satisfied with the decision considering the increase in commodity prices globally due to the Russia and Ukraine conflict as well as supply chain disruption.