BANDAR SERI BEGAWAN — A Legislative Council (LegCo) member has proposed the review of fuel subsidies to reduce the government’s widening budget deficit.
YB Iswandy Ahmad said the government should remove the fuel subsidy for commercial, heavy and luxury vehicle owners to ensure assistance is rendered to “those who really need it”.
“These subsidies can [instead be redirected] to improve other services such as upgrading public transport and infrastructure,” he said during the 17th LegCo session on Wednesday.
Fuel subsidy reforms would also help support the government’s target of 65% electric car adoption by 2035 as use of combustion-engine vehicles will slowly phase out, he added.
In response to YB Iswandy’s proposal, the second minister of finance and economy said that eliminating fuel subsidies on commercial and luxury vehicles may not save the government a lot of money as they only make up a small number of car sales.
YB Dato Seri Setia Dr Hj Mohd Amin Liew Abdullah said fuel subsidies amounted to around $100 million to $300 million each year depending on oil price fluctuations.
He added any review on the petrol subsidy must be done with the Ministry of Energy and take into consideration the needs of low income groups.
In the past, the government has taken measures to reduce the amount it spends on fuel subsidies, including a 2008 move to raise pump prices on foreign-registered cars.
Speaking on electric vehicles (EV), YB Dato Dr Hj Md Amin said Brunei’s small domestic market is a challenge if it wants to create an EV assembly plant in the country.
“The focus is now on EV cars, but we must not forget that there may be alternative energy in the future… We have heard of hydrogen-powered cars and others.
“Regardless of how environmentally-friendly the EV is perceived to be, it still uses electricity, so we shouldn’t focus too much on EV because it’s the ‘flavor of the day’,” he added. “The future of this industry may change again.”
Fiscal Consolidation Programme saved gov’t tens of millions of dollars
The minister further said the Fiscal Consolidation Programme introduced during the 2018/19 financial year has seen early success, saving the government tens of millions of dollars each year.
The outcome of the programme may only have a significant impact on Brunei’s fiscal position in the next few years but the restructuring of telco services and Muara Port has seen promising savings, he said.
“We have begun to see the impact in projects such as Muara Port in collaboration with Muara Port Company (MPC) ,which saved the government at least $20 million a year,” he said.
MPC is a joint venture company of Darussalam Assets. MPC took over the management of Muara Port on July 2018.
YB Dato Dr Hj Md Amin added that the establishment of network infrastructure provider Unified National Networks (UNN) has saved the government $30 million in its first year of operations.
The minister made the remarks in response to YB Siti Rozaimeriyanty DSLS Hj Abdul Rahman’s question on the impact of the Fiscal Consolidation Programme.
The programme was introduced to reassess government revenue and expenditure and focus on spending than can spur economic growth and promote more efficient services.