Managed float: Gov't to save RM11 bln this year

The managed float system for the fixing of retail prices of fuel implemented in December last year is expected to save the government RM11 billion this year.

Deputy Finance Minister Datuk Johari Abdul Ghani said the rationalisation move had also fulfilled the government's goal of meeting global economic challenges and channel the saving to target groups such as those in the lower income category.

"Similar to reducing the sugar subsidy implemented in 2013 with savings of RM300 million annually, all rationalisation subsidy is returned to the people," he added.

He said this when answering a question from Senator Dr Syed Husin Ali in the Dewan Negara here today.

Syed Husin had wanted the ministry to state the savings from the abolishment of subsidies this year by type.

Elaborating further, Johari said the savings had also gone towards improving the 1Malaysia People's Aid (BR1M) annually and for helping with cash handouts for schooling.

"Other assistance took the form of the 1Malaysia Book Voucher, increasing the number of Kedai Rakyat 1Malaysia, opening more 1Malaysia Clinics and a bigger allocation for educational assistance in next year's budget," he added.

He said the savings can also be channeled to relevant ministries to come up with ways to assist the people such as allocations for Peoples Housing Projects (PPR) and also the construction of more affordable houses.

Johari added that apart from savings to assist the people, the subsidy reduction and rationalisation move could also eliminate leakages.