How far can the petrol subsidy take your car or motorbike?

The consumers’ consensus is that the quantum would last for a week of petrol consumption


THE mechanism of the targeted petrol subsidy announced in Budget 2019 by the government has been finally made public on Monday, a few days ahead of Budget 2020 on Friday.

The new targeted subsidy scheme of RON95 is rated at RM30 a month for a car and RM12 for a motorcycle.

This means the recipients, mainly those in the bottom 40% (B40) bracket, would receive RM360 yearly as fuel subsidy for a car and RM144 for a motorcycle.

The amount will be automatically credited into the recipients’ accounts every four months.

Applicants must fulfil the vehicle-ownership criteria, which are fixed for cars of 1,600cc and below, and those of over 1,600cc and 10 years old and above.

Motorcycles of 150cc and below, and those of over 150cc and seven years old and above, are qualified for the programme.

Those driving a Mercedes C 200 1.5L or Volkswagen Polo 1.6L are not eligible. Unless you are a recipient of the Bantuan Sara Hidup (BSH), that 1,000cc motorbike you have been keeping inside the garage for more than 10 years is also not eligible.

The new petrol subsidy programme is targeted for the B40 group, particularly for the BSH beneficiaries, with addresses in Peninsular Malaysia only. If an applicant has a car and a motorcycle, the subsidy will be limited to one that is higher — which is RM30 a month for the car owned.

The new targeted subsidy mechanism is expected to benefit about 2.9 million vehicle owners in the country, including disabled individuals.

MIDF Research stated that there is an estimated potential pool of three million of BSH recipients who currently do not qualify for the fuel subsidy programme.

The BSH programme now has a total group of 6.2 million beneficiaries. The total amount of subsidy given is estimated at RM65.4 million a month or RM785 million a year.

The consumers’ consensus is that the quantum — RM30 for a car every month or RM12 for a motorcycle — would last for a week of petrol consumption.

A Proton Saga 1.2L owner said the RM30 would be enough for a week of travel between home in Damansara and work in Kuala Lumpur (KL), based on the current fuel price of RM2.08 per litre.

Similar fuel economics is also seen for the Perodua Axia 1L. For the Perodua Myvi 1.5L , the consumption could exceed RM50 weekly for a journey from Sungai Buloh to KL.

For a Yamaha 135LC, a RM12 worth of petrol could also last for a week, while for a motorcycle below 150cc can travel as far as 180km with a RM12 of petrol, one rider said.

MIDF Research said the targeted subsidy programme could lead to a potential demand for smaller engine capacity models, which would benefit national carmakers Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and Proton Holdings Bhd.

“The maximum income for the BSH recipient group is RM4,000 per month, assuming a 30% allowable loan commitment. We estimate a maximum allowable monthly loan commitment at RM1,200. This should serve as a yardstick to the expected models that car buyers in the BSH recipient group would be looking at,” the research house noted in a report yesterday.

As it is, the national carmakers dominate the lower price and lower capacity segment of the local automotive market.

For example, MIDF Research stated that the Perodua Axia has an estimated monthly instalment of RM270 at an average selling price of RM22,990, the Proton Saga RM386 per month at an average price of RM32,800 and the Perodua Bezza RM406 per month at an average price of RM34,490.

Japanese-made Toyota Vios, Honda City, Nissan Almera and Mazda 2 are among non-national car models that sit in the RM1,200 monthly loan commitment bracket.