Trial run for targeted fuel subsidy to begin in March

By P PREM KUMAR &  ALIFAH ZAINUDDIN / Pic By ISMAIL CHE RUS

The government’s plan to introduce targeted fuel subsidy for the bottom 40% (B40) income bracket will be carried out in stages with the trial run slated in March.

Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail (picture) said the trial run would commence a month before the implementation of the fuel support scheme.

“I am optimistic that by the second quarter of next year, we will be able to implement it (targeted fuel subsidy) according to the schedule.

“It will be done in stages and not all at once. This will be done gradually and a trial run is in order to prepare the public for it,” he told the Dewan Rakyat yesterday.

Saifuddin also said as fuel prices are known to be sensitive and volatile, adjustments are needed to ensure that the implementation mechanism would benefit those who are eligible.

“There will be those who will qualify to receive the subsidy, and there will be those who will not.

“The ministry will take into account the views from all stakeholders before it is fully implemented,” he added.

Saifuddin was replying to a question from Merbok MP Nor Azrina Surip who requested the ministry to provide an update on the implementation of targeted petrol subsidy announced in Budget 2019.

He said the Domestic Trade and Consumer Affairs Ministry (KPDNHEP) has gathered feedback from various parties including the Finance Ministry (MoF), Bank Negara Malaysia (BNM), associations, consumers and petrol station operators.

“We want to ensure that the new system is seamless, so that the implementation is smooth. It has to be scalable, so that we can use this mechanism for other targeted subsidies (apart from petrol),” he said.

Saifuddin added that the MoF has issued a request for proposal for interested parties to study, develop, test and implement the targeted fuel subsidy system.

The government will choose the most competitive proposals based on cost and implementation, he said.

Currently, Malaysians consume 1.2 billion litre of petrol every month, 90% of which is RON95.

The price of RON95 petrol and diesel have been pegged at RM2.20 and RM2.18 per litre respectively, while the price of the premium RON97 petrol is subject to a float system.

Under the federal government’s budget, cars with engine sizes below 1,500cc are entitled to a subsidy of 30 sen per litre for 100 litre of RON95 petrol.

Finance Minister Lim Guan Eng said a total of RM2 billion would be set aside for the subsidy programme, which is expected to benefit some four million car owners and 2.6 million motorcycle owners.