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KUALA LUMPUR (Islam Online) - Policy makers in Malaysia are moving towards a more self-reliant society that does not depend too much on government subsidies and assistance. Malaysia's Finance Minister Daim Zainuddin said that the subsidy mentality must be discarded. The increase in crude oil price on the world market forced the Malaysian government to increase the prices of petrol and fuel. The price of crude oil surged to a 10-year high of $36 a barrel earlier this month. Malaysia's petrol pump price of $0.29 per liter is subsidized by a hefty $0.12 by the government. Prices were last raised in 1990. The government had absorbed increases in oil prices by directly subsidizing the fuel, amounting to about RM1.2 billion, over the past eight to 10 years. Zainuddin said that retail petrol and diesel prices should have gone up a long time ago but the government held its decision back. "It was not a question of increasing prices but rather of the fuel subsidy being too high. "We want to reduce it a little. Malaysians always want subsidies. We must discard this subsidy mentality. "When you talk of rise in [petroleum] prices, you must talk of subsidies. We are one of the few countries which have a huge subsidy on petroleum," Daim said. The Finance Minister added "Billions of dollars has been spent on the subsidies and that in 2000 it is still going to be high. In 1998 alone, the Government spent $120 million as subsidy. Zainuddin said Malaysians must realize that the government's subsidy benefited foreigners who bought petroleum from border areas. Countries like Thailand, Singapore and Indonesia, which borders Malaysia, has much higher petrol prices. "[It is] no use that when we subsidize, others profit. Don't forget that when petroleum is cheap, others take advantage," he said Large amounts of petrol are bought at border areas due to the fact that Singaporeans, Thai nationals, and Indonesians enter Malaysia to buy fuel. There has been a notable increase in sales of fuel in the north and south of Malaysia. He also said the increase in petroleum prices would not affect the country's growth and advised Malaysians to spend wisely. The Finance Minister, also a strong man in the ruling Malay party, United Malays National Organization (UMNO), dismissed the idea that the increase in international prices would be a boon to Malaysia. "It's a boon, but we also import. Our exports are premium oil and we import heavy crude. So, it cuts both ways," he said. Zainuddin also said it was his view that international oil prices would come down sometime next year. Probably after winter. |
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