Higher fuel prices better for the environment, says Rafizi

The economy minister says Malaysia can no longer afford to lower fuel prices and must transition to using renewable energy.

(FMT) – Lowering fuel prices is counterproductive to the country’s environmental ambitions and plans to transition to renewable energy, says economy minister Rafizi Ramli.

He said the government has ambitions to transition to renewable energy within the next 30 years, and people must change their mindsets where fuel prices are concerned.

“Any populist decision on fuel (prices) will be counterproductive to that long-term target.

“The country can’t afford it (lowering fuel prices) anymore because fuel and power subsidies easily contribute to 25% of our operating budget every year,” he said at an event here today.

Rafizi said if Putrajaya was too lenient in providing fuel and power subsidies, it could cost the government up to RM80 billion out of the total RM300 billion allocated for its operating expenditure.

He said a greater adoption of renewable energy was the way forward, adding that Malaysia has the potential to be a regional leader in leading the energy transition.

However, he said, there must first be a greater emphasis on a “green economy”, which prioritises low carbon emissions, resource efficiency and social inclusivity, across all sectors and industries in the country.

Rafizi said the government will announce its Energy Transition Roadmap, which translates the National Energy Policy into energy transition projects, next month.

He said the roadmap will provide clarity on Putrajaya’s plan for the next four to five years in paving the way to achieve its ambition of 70% renewable energy capacity in the country by 2050.

On a separate matter, asked if the Cabinet has discussed plans to peg the ringgit, Rafizi said there have been no such discussions.

He said he would wait for Bank Negara Malaysia (BNM) to decide on monetary policies, adding that the government will respect the central bank’s discretion in doing so.

Last Friday, deputy finance minister Ahmad Maslan said the government and BNM would discuss strategies to deal with the continuous decline in the value of the ringgit at the weekly Cabinet meeting.