KUALA LUMPUR: Malaysia will have to fork out about RM70 billion in subsidies this year, including RM30 billion on fuel alone, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said.
And the government still had the means to continue supporting the rakyat with these subsidies, Tengku Zafrul added.
He also hinted that more help from Petroliam Nasional Bhd (Petronas) in the form of additional dividend, was not needed for now.
"Over the short term, we have the money to still continue to support our rakyat in terms of ensuring the livelihoods, especially for the vulnerable group, are protected.
"Our inflation target is still within what we said before between 2.3 per cent and 3.3 per cent," Tengku Zafrul told reporters after the launch of Khazanah Nasional Bhd's sustainability framework and medium-term targets here on Friday.
He added that over the medium and long term, the government was still studying ways to implement a more targeted subsidy, as announced previously.
"We see this as necessary as for every RM1 subsidy provided by the government, 53 sen goes to the upper class or the T20," he said.
On the possibility of the government asking Petronas for an additional dividend this year to help accommodate rising fuel subsidy, Tengku Zafrul said the matter had not been discussed yet.
"We are seeing this in totality. Thankfully, the government's revenue has been increasing in line with the rising prices of commodities.
"We continue to monitor the situation as it develops," he added.
On Friday, Brent crude futures was trading at US$122.48 per barrel.
Earlier this month, industry observers said Petronas would likely pay more dividends to the government this year than the RM25 billion it had committed given record-high oil prices and its best-ever quarterly profit in at least a decade.
Oil prices on both sides of the Atlantic have soared to their highest in over a decade in 2022 and are up more than 55 per cent so far this year.
"There is a possibility that the government would expect Petronas to announce a higher dividend this year," Putra Business School associate professor Dr Ahmed Razman Abdul Latif said.
RHB Research feels that it is highly likely for Petronas to pay more especially when the fuel subsidy is ballooning amid high oil prices.
"Petronas, in our view, has the capability to pay another RM10 billion to RM20 billion in special dividends in 2022-2023, to reduce the government's financial burden without a significant deterioration to its net cash position," the firm said.
RHB Research has maintained its 2022-2023 crude oil price forecasts at US$104-US$85 per barrel.
Meanwhile, Khazanah has launched the sustainability framework and medium-term targets, to guide the sovereign wealth fund and its key investee companies to deliver sustainable value by integrating ESG considerations into their core business.
Tengku Zafrul said the ministry was confident that both public and private sectors would play their respective roles and contribute to the success of Malaysia's sustainability efforts and goals.
"It is thus encouraging to see that Khazanah, as well as other government-linked companies such as the Employees Provident Fund, Tenaga Nasional Bhd, CIMB Group Holdings Bhd, and Petronas, embrace the sustainability agenda by incorporating ESG into their core strategies and embedding it throughout their operations and corporate social responsibility initiatives," he said.
Source: https://www.nst.com.my/business/2022/06/804238/govt-will-continue-help-rakyat