Subsidizing the retail price of fuel for motorists has cost the government millions – this week, the total cost amounts to RM101.52 million – and the money can obviously be better spent for other purposes. However, subsidizing fuel prices has helped not just those who really need assistance but also many who can afford to pay more for their fuel.
So over the past year, the government has been trying to find a way to target subsidies to make sure that only the groups that need fuel at subsidized prices get them. The approach has been finalized and announced today by the Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail. The planned implementation date will be at the beginning of 2020 so we should be hearing the full details from the Finance Minister in the coming Budget speech on October 11.
RM30/month for cars, RM12/month for motorcycles
Subsidies under the Program Subsidi Petrol will be given to eligible motorcycle and car owners in Peninsular Malaysia who are also registered for Bantuan Sara Hidup (BSH). Those with motorcycles will receive RM12 a month while those with cars will receive RM30 a month. The subsidies will be paid into bank accounts of the recipients every 4 months.
Among the additional conditions are that for cars, the maximum engine size to qualify is 1600 cc or if above 1600 cc, the vehicle should be over 10 years old. Some 2.9 million people will receive the subsidies which are expected to total around RM65.4 million each month.
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Only for Peninsular Malaysia
For now, it has been revealed that the scheme will apply only in Peninsular Malaysia. For the states of Sarawak, Sabah and Labuan, there will be no subsidy scheme; instead, the price of RON95 petrol will be maintained at RM2.08 per litre. There is no mention of how diesel will be treated, though.
RON97 has not been subsidised and its pump price has been set each week according to the 36-year old Automatic Pricing Mechanism (APM) which takes into account global oil prices. Likewise, from January 2020 onwards, RON95 prices will also be based on the APM so expect significant changes which may require you to drive more economically.
