Govt Working On Several Mechanisms To Offset Fuel Price Hike - Bernama

BUTTERWORTH, June 8 (Bernama) -- The government is working on several mechanisms to offset the fuel price hike and not depending solely on the restructuring of the subsidy package.

Second Finance Minister Tan Sri Nor Mohamed Yakcop said due to the escalating crude oil price in the world market, the government had to find other means of easing its burden and that of the people.

He said the government had spent RM33 billion on fuel subsidies and there was no sign that the price would drop.

"The fuel price restructuring has enabled the government to save RM4 billion but when the crude oil price went up to AS$138.54 a barrel (RM450.25) on Wednesday, the saving was wiped out," he told reporters after opening Tasek Gelugor Member of Parliament's service centre at Taman Merbau Indah, Sungai Dua, here today.

He said with the rise in the crude oil price every day, the cost of subsidies borne by the government could reach RM40 billion, a huge sum and as big as one year allocation for development. Nor Mohamed said the geopolitical risk factor following the Israeli threat against Iran could surge the world crude oil price even further.

The government had to consider several other mechanisms to lessen the effects and ensure that the people would benefit from them, he added.

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