Malaysia's Prime Minister Anwar Ibrahim has described reports from foreign media about cuts to fuel subsidies by June 2024 as "unethical".

He also went on to say that there was no final decision made by Malaysia's cabinet.

Criticised rumours about fuel subsidies and casino license

On May 3, The Straits Times reported that the Anwar’s government would cut fuel subsidies soon after the May 11 Kuala Kubu Bharu state by-election.

ST quoted official and industry sources, saying that after the by-election, by June 2024, diesel prices would be allowed to float to market rate within a matter of weeks.

It went on to say that retail rates of petrol would see a staggered rise after that.

The ST report was picked up by Malaysian news outlets like Malaysiakini and Free Malaysia Today.

This comes at a delicate time, as analysts see the KKB by-election as a marker for the state of Malaysia’s government, particularly in regards to the health of the unity government, especially in view recent events, such the KK Super Mart sock incident.

Blasted international media

Speaking at an Aidilfitri event in Penang on May 5, Anwar responded negatively to the report of a cut to fuel subsidies.

He was quoted by Bernama as saying that because of his government's firm political stance, “neighbouring and international media continue to attack in terms of negative news”.

Anwar also cited rumours of an agreement to consider a casino licence for Forest City in Johor, in a report published by Bloomberg, but later denied by Anwar.

Bernama further quoted Anwar as saying that the casino issue had never been discussed, and information had never reached him, but nonetheless it had become a “hot issue”.

Untimely report

The diesel subsidy on the other hand, had had some initial discussions, but there had been no final decision regarding the implementation date.

Anwar said that the methodology of the subsidy cut would need to be explained, and that the principle of the matter was that “it should not burden the people”.

Anwar also critiqued foreign media reports for quoting information from "unreliable sources".

Bernama quoted Anwar as saying “We accept the principle of freedom (of the press) but there is an ethic based on facts”.

“Citing information needs to be from a reliable source. This is a matter of policy that requires the government to give notice and make announcement (sic).”

Pre-emption

The New Straits Times quoted communications minister Fahmi Fadzil saying on May 4 that the cabinet had yet to discuss the issue, and that the cart should not be put before the horse.

He said that the report should only have been published after the policy had been announced, adding that he had seen that several foreign based media outlets had “pre-empted the process”.

He added that he hoped that all parties, including the media, can obtain information from credible sources.

However in April 2024, Economy Minister Rafizi Ramli said in an interview with Bloomberg that the government will stick to its plan of cutting fuel subsidies in order to boost investor confidence in the economy.

Subsi-do or subsi-die

Malaysia has implemented significant domestic fuel subsidies for both diesel and petroleum for several decades.

One of Anwar’s major domestic policy objectives since coming to power in 2022 was to either cut or eliminate domestic fuel subsidies in order to strengthen Malaysia's fiscal position.

Anwar’s government’s position is that the subsidies, on balance, benefit the rich more than they do the poor.

Anwar even joked during a September 2023 visit to Singapore, that the fuel subsidy benefitted rich Singaporeans more than they did the intended recipients, Malaysia’s poor.

He also described the subsidies as was currently practised as “irrational and uneconomic”, saying that Malaysia could save billions by reducing subsidy misuse.

However, there are also fears that cutting subsidies would put even more pressure on Malaysia’s poor, already enduring a significant cost of living crisis.

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Top image via Anwar Ibrahim/Facebook