The move to reduce fuel subsidy through rationalisation will give the government the ability to implement more programmes and infrastructure development to improve the welfare of the people.

Deputy Minister of Agriculture and Agro-based Industry Tajuddin Abdul Rahman said the government made the correct decision because with the reduction, the increased savings would help the economy and altogether increase allocation to the people.

"The savings from the reduction of fuel subsidy would actually benefit the people more," he told reporters after delivering cattle to be slaughtered for Aidiladha at the Simpang Empat Mosque, Chenderong Balai in Pasir Salak today.

He was asked to comment on the announcement of the reduction of petrol and diesel subsidy by 20 sen effective Oct 2 by the Ministry of Domestic Trade, Cooperatives and Consumerism.

The new retail price for RON95 petrol is RM2.30 per liter and RM2.20 per liter for diesel.

"We want to use the money from the reduction of subsidies for development programmes which can improve the economy of the people, and as the economy grows people will have better purchasing power," he said.    

As an example Tajuddin cited RM2 billion has been allocated for farmers through various schemes and programmes to increase rice production and improve rice yield.

He said the income of the farmers must also be increased in line with the government's mission to become a developed and high-income nation by the year 2020.

He said various mechanisms to help those in need of assistance and subsidies are expected to be announced by Prime Minister Najib Razak in the 2015 Budget next week.

- Bernama