Ministry to study impact of reduction of fuel subsidy rationalisation on housing sector
Datuk Amar Abang Johari Tun Openg
KUCHING: Housing Minister Datuk Amar Abang Johari Tun Abang Openg is optimistic the federal government will introduce a mechanism to cushion the impacts reverberating from the recent fuel price hike.
He hoped the Najib administration would channel savings from the rationalisation of petrol subsidies to develop the rural areas of Sarawak and Sabah.
In the meantime, Abang Johari said his ministry was studying the implications of the recent fuel price hike on the housing industry.
“The savings from the rationalisation of subsidies should be used to build roads and to supply electricity and water to the rural areas of Sarawak and Sabah.
“For the housing industry, there will be an increase in cost to developers. We will look into it. I can’t comment at the moment,” he said when met by reporters here yesterday.
Abang Johari conceded the fuel price hike would have a “slight impact on inflation” based on economic theories.
He, however, justified the government’s move in increasing the prices of RON95 and diesel by 20 sen by stating that fuel prices in the country “are the cheapest in the region.”
“If we don’t reduce the subsidies, we will have problems also. Smuggling will continue because our petrol prices are the cheapest in the region, meaning petrol will be smuggled to other countries, meaning a loss to Malaysia.
“Furthermore, the rich gain more from the subsidy than the poor because low-income earners use less petrol, while the rich drives fuel-hungry vehicles.”
For instance, he said, a Mercedes-Benz consumes more fuel than Made-in-Malaysia automobiles.
“The poor don’t gain much from the subsidies because for every single litre used, the rich probably used 10 litres. The rich get more, so now we want to balance it up.”
To a question, Abang Johari said the state government hoped more allocations could be announced in the coming federal budget to further develop rural Sarawak.
“I also hope to get more allocations for the housing industry because prices of houses are rising and we want to control the prices. We want to help the middle class to buy a house. If prices go beyond their reach, it is also a problem.”
On another matter, Abang Johari, also Minister of Tourism, said tourist arrivals for Sarawak rose by seven per cent as of June this year against the corresponding period last year.
“For July, August and September, there will be more than what we have expected because there were a lot of events. And October, November and December is the holiday season and will add up the figure.