The Malaysian government is examining the best method to adjust petrol subsidies nationwide.
This step is taken to save on the use of national funds since petrol is one of the commodities most used by the people.
However, the implementation of this subsidy adjustment must be done carefully because it can have a major impact on various levels of society.
If petrol subsidies are launched by the government, the B40 group could be the community most affected because a large part of their income is used to cover transportation costs.
In addition, the M40 group is experiencing pressure in financial management, especially important costs such as children's education.
The T20 group is said to be unaffected by this situation, which allows them to absorb higher costs without risking their lifestyle.
In addition, these subsidies can have an impact on the economy, especially involving transportation costs which are at risk of increasing and can cause food prices to soar.
Meanwhile, the people's purchasing power can decline and stagnate because they focus on buying essential goods, especially food, compared to other products.
According to the Laffer Curve Theory, increasing petrol subsidies can affect economic activity due to excessively high taxes.
Among the suggestions that can be implemented by the government include gradually increasing petrol prices to avoid inflationary shocks and planning a transition to green energy.
In conclusion, the petrol subsidy plan is a bold step by the government in strengthening the country's fiscal position, but its success depends heavily on transparent and effective communication with the people.
