PUTRAJAYA: Prime Minister Datuk Seri Anwar Ibrahim today said that the government will continue providing subsidies to the people, but emphasised that it needs to be targeted to avoid leakage and to ensure that it would only benefit the deserving groups.

Anwar, who is also Finance Minister, said this was because, at present, the super-rich and 3.5 million foreigners in the country were also enjoying the benefits of government subsidies.

"The government has been providing RM81 billion in subsidies, the highest in the world. Although I was often criticised for the statement promising that "the day we come to power, the following day fuel prices will drop", it is a different context because at that time, the oil price in Saudi Arabia was 50 sen, and now it's RM2.85 there, while here it's RM2.05.

"The subsidies for fuel, chicken and electricity were also enjoyed by 3.5 million foreigners and 10 per cent of the super-rich, and this does not include those smuggled out. Hence, proper planning needs to be done to prevent leakage," he said at the monthly assembly with staff of the Prime Minister's Department here today.

Citing diesel subsidy as an example, Anwar said there is a need for a policy to address subsidy leakage because the government found that the number of vehicles has not shown an increase as significant as the increase in diesel consumption.

"This means that diesel was being taken out (smuggled)...that's why we are improving the policies on diesel subsidy," he said.

-- BERNAMA