Government to maintain subsidies despite rising oil prices

KUALA LUMPUR: The government will continue to protect the population from the effects of a sharp rise in inflation by continuing to provide subsidies despite the rise in world oil prices resulting from the Russian-Ukrainian war.

Director of the National Budget Office, Datuk Johan Mahmood Merican, said it was the government’s commitment which also took into account that the country was still in the early stages of recovery from the impact of Covid-19.

“The government is maintaining the current subsidy policy to protect people from price hikes and food supply chain disruptions, even though the cost of subsidies has increased significantly,” he said.

Johan said this on Bernama TV’s Ruang Bicara program titled ‘JaminKerja and Semarak Niaga for Keluarga Malaysia’ which aired last night.

He said unrest between Russia and Ukraine had pushed oil prices above $100 a barrel, while the 2022 budget prepared by the government was based on the projected or assumed oil price of $67. the barrel.

He added that currently Malaysians can still enjoy the RON95 oil price of RM2.05 per litre, which is one of the lowest prices compared to oil producing countries such as Saudi Arabia as well as neighboring countries.

Without the subsidy, the price of oil is already touching RM4 per litre.

“Rising oil prices have also pushed up palm oil prices, but the government continues to provide subsidized one-kilogram packets of palm oil at the retail price of RM2.50 per packet. , although according to the current market price, it is worth closer to RM10,” Johan said.

Apart from this, he said the government has also kept the chicken and egg price subsidy at a cost of over RM500 million for a period of four months to stabilize the prices, thus controlling the rate of inflation. .

At the same time, Johan said the government was confident it would be able to meet the projected gross domestic product (GDP) growth rate of 5.5-6.5% and create 600,000 jobs through the JaminKerja initiative this year.

He pointed out that last year, 560,000 jobs were created despite the high number of Covid-19 cases and deaths.

He noted that the unemployment rate fell to 4.2% in January 2022 from 5.3% in May 2020, an overall positive indicator.

Johan also praised the short-term employment program (MySTEP) which offers training and placement in the public sector and government-linked enterprises (GLCs), saying the program provides meaningful work experience and improves skills. employees, helping them get a job. once the contract expires.

“While employment in this program is temporary or contract, it allows graduates, school leavers and less capable people to earn higher wages in later jobs because they already have experience. with reputable companies or organizations,” he said.

The RM1.8 billion MySTEP program initiative provides 80,000 contract employment opportunities – 50,000 in the public sector and 30,000 in GLCs and their strategic partners.

Johan also said that with the country entering the transition to the endemic phase on April 1, all economic sectors, including the tourism sector, will be able to boost their business activities with the help of the government through the various support facilities. – Bernama

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