Present fuel, power subsidy benefiting the rich, targeted subsidies needed, says Zafrul

SHAH ALAM - Putrajaya is studying ways to implement electricity and fuel subsidies to ensure the targeted group or the lower-income group benefits, said Finance Minister Tengku Zafrul Aziz.

He said there is no perfect method to implement targeted subsidies but "we should try our best to reduce these leakages and to help those in need."

In an interview with Sinar Harian, he said at the moment the higher income group enjoys more subsidies based on their consumption and this can be seen from the usage of Tenaga Nasional Berhad (TNB).

For instance, he said for the first half of 2022, the government has maintained electricity tariffs, costing the government RM700 million worth of subsidies.

He said about 10 percent of residential electricity users are high-income earners and use more than 600kwh per month or bills exceeding RM220 per month...

"The total 10 percent of users use almost 40 percent of the total subsidy," he said.

Zafrul added those who use lesser than 300kwh or up to RM70 per month were 60 percent of the consumers who overall enjoy 25 percent of the subsidy.

Currently, 4.6 million users use less than 300kwh and enjoy a subsidy of RM40 for 6 months, another 900,000 users use above 600kwh and receive a subsidy of about RM300.

"Is this fair," he asked.

Due to that, he said the government is reviewing the best way to implement targeted subsidies.