The federal government will not change the budget for 2016 despite the sharp drop in oil prices as the effect to its coffers is still manageable, according to Deputy Finance Minister Datuk Johari Abdul Ghani, reported The Sun Daily.
“When we did the budget, it (the oil price) was based on US$48 per barrel, but now it has dropped to US$36. However, the impact on the government’s revenue is not much and I don’t see there is a need to do a revision at this moment.”
Instead of revising Budget 2016, the authorities would make adjustments on its spending, like on development expenditures, he said.
“Even if the oil price drops below US$30, we can (still) adjust our spending, I think we don’t need to do any revision,” noted Johari, adding that they will continue to look at oil price movements until Q1 2016.
Commenting on the proposal to set fuel prices on a weekly basis rather than monthly, he said the government is open to this suggestion, but petrol companies and gas station operators should also consent to it. There is also a need for a system for setting fuel prices based on this time frame before it can be done.
“The advantage of doing this on a weekly basis is the fuel prices would be more reflective of the current market and its changes would not be too drastic for consumers.”
On this matter, the Petrol Dealers Association of Malaysia (PDAM) plans to submit a proposal to the Finance Ministry next week, added Johari.