Government to Now Rationalize Subsidies For Sugar, Rice and Cooking Oil

The government is studying plans to rationalize subsidies for essential goods, including sugar, rice, and cooking oil, Deputy Finance Minister Lim Hui Ying told Parliament today. She said the move will be implemented gradually and in phases, similar to the ongoing fuel subsidy rationalization to prevent leakages and ensure aid reaches only those who truly need it.

“The government will review the gradual and phased implementation of targeted subsidy assistance for goods such as sugar, rice, and cooking oil,” Lim said.

She was responding to a question raised in the parliament on the government’s plan to extend targeted subsidies to these essential food items. The deputy finance minister said the review aims to strengthen the efficiency of Malaysia’s subsidy delivery system, while ensuring that financial aid continues to benefit low-income groups.

At present, she said, the government’s main focus remains on ensuring the smooth rollout of targeted fuel subsidy programs such as BUDI95 and the diesel subsidy scheme, both of which form the foundation for broader subsidy restructuring.

“The government will study ways to rationalize subsidies on other goods in stages and phases to plug leakages, just as we did with RON95 and diesel,” she said.

The BUDI95 program, introduced in late September, allows Malaysians aged 16 and above with a MyKad and an active driving license to purchase up to 300 litres of RON95 petrol per month at the subsidized price of RM1.99 per litre.

Malaysia had earlier withdrawn blanket diesel subsidies as part of its efforts to reduce wastage and fiscal pressure. Lim said the success of these targeted fuel subsidies will serve as the model for expanding rationalization to other essential goods. She noted that the government’s subsidy rationalization efforts are part of the broader plan to reduce fiscal strain and reallocate resources towards socio-economy development.

Under the current administration, subsidies for electricity, diesel, and RON95 have already been restructured into targeted schemes, laying the groundwork for the rationalization of other essential goods.

Sources: SAYS