The government's agenda to implement subsidies serves as a tool to ease the burden of the people, but economists warn that the cost of maintaining subsidies continuously may be high.
Reducing fuel subsidies not only alleviates the hardship of the people but also has adverse effects including excessive consumption, waste and profits for the rich.
Economist, Geoffrey William stated that increasing inequality occurs when the value of the subsidy exceeds the benefits and now the challenge is directed towards damage if uncontrolled compared to the cost of spending.
Economic analyst, Madeline Berma said that this subsidy is not something negative, but is more beneficial to the elite than the vulnerable.
Next, Berma also commented that the government has successfully advanced diesel subsidies and carried out targeted initiatives such as the Budi Madani program.
Economists from the University of Malaya also stated that subsidies encourage waste because almost 15% of the upper class and foreign citizens have enjoyed the RON95 petrol subsidy worth RM8 billion.
The Ministry of Finance described this program as helping the government save RM7 billion by reducing waste and smuggling activities.
