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KUALA LUMPUR: The government is still testing the targeted subsidy mechanism for petrol to ensure the system being implemented is suitable and easy to use for both the urban and rural areas.

Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz reiterated that the testing will take three to six months before the start of the phased implementation which is intended to prevent a surge in inflation or adverse impact on the economic growth momentum.

"Our strategy is to implement in phases the switch from blanket subsidies to a combination of targeted subsidies and cash assistance.

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"With the rising cost of subsidies, the government also has to find ways to cover subsidies by coming up with guidelines on public expenditure savings,” he said when tabling the 104th People’s Financial Report on Facebook today.

Tengku Zafrul said the measures to save on spending will help fund any subsidy-related enhancement for the people’s welfare.

"Therefore, ministries, departments and agencies need to restructure allocations and propose savings on the operating allocation to achieve the target of at least five per cent savings on the remaining operating allocation for 2022,” he said. - Bernama