Guan Eng: 2019 Budget recalibration only if average oil price slips below US$50 a barrel
Govt will do so if average oil price drops below US$50 per barrel, says finance minister
THE government will recalibrate the 2019 Budget if the average price of crude oil drops below US$50 (RM209) per barrel, Finance Minister Lim Guan Eng said.
“We did not recalibrate the budget when crude oil prices went up from US$52 per barrel to US$70 per barrel (earlier this year).
“Similarly, when average crude oil prices dropped from US$70 per barrel to US$52 per barrel (recently, we did not) recalibrate the budget — we will (only do so if prices drop below) US$50 per barrel.
“(That’s because) we cannot look at daily prices. We must look at average prices. There is a difference,” he said at the launch of the Occupy Beach Street’s Christmas Run here yesterday.
The 2019 Budget was tabled by Lim last month at a time when average crude oil prices were US$70 per barrel.
Lim said analysts and fund managers believed that crude oil prices would rebound to US$70 per barrel.
“However, it will take some time to return to that. As it is, the market is now volatile. Nowadays, what United States President Donald Trump says, or (developments in) the trade war (between the US and China), will have an impact (on the market).
“So we will have to wait and see next year. For now, the average crude oil price is above US$50 per barrel.”
Last week, oil prices crashed to new one-year lows, erasing between four and seven per cent of their value as they were dragged down by a deepening sense of global economic gloom and fears of an oversupply in the oil market.
Lim said the government’s focus would be on improving the people’s wellbeing.
He said with savings by the administration and the commitment by Prime Minister Tun Dr Mahathir Mohamad, the government would improve the people’s livelihoods.
“Recently, we announced a RM77 million allocation for Felda settlers. We announced RM164 million for rubber smallholders.
“On top of that, we announced RM328 million for schoolgoing children from households earning below RM3,000 a month. There was also the announcement of a RM500 special payment. We will continue to improve the people’s wellbeing.”