“I think the reduction of subsidies at this time won’t have much of an effect because oil prices have recently declined. When the price of oil is cheaper, not much of subsidies are needed. We can reduce subsidies but it needs to be done gradually, little by little,” he said when met by reporters after the 11th MAHSA University convocation ceremony in Putrajaya today.
He added, the abrupt abolition of fuel subsidies may affect the nation’s economic situation. “In general, I agree with the reduction in subsidies. However, whatever we do, we need to do it in stages. The reduction should be gradual until it is completely abolished because it can influence the economic situation,” he said.
On Friday, Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek announced the price of RON95 petrol and diesel will be fixed according to a managed float system effective Dec 1. This mean subsidies for both the petroleum products will be abolished following the fall of global fuel prices which is currently lower than that at petrol pumps.