Petrol subsidy programme postponed


THE petrol subsidy programme (PSP), scheduled for implementation in January 2020, is now postponed to a later date following a Cabinet meeting on Dec 18.

Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail said the postponement is due to the need for elaboration and clarity in order to provide better understanding and prepare consumers for the PSP implementation.

“In addition, the registration process of beneficiaries from the middle 40% (M40) income group will also be handled by the Ministry of Finance,” he said in a statement yesterday.

He said while waiting for the confirmation of the programme’s implementation, beneficiaries will be enjoying the current petrol rates.

First announced on Oct 7, the government had allocated RM2.4 billion for the programme in Budget 2020. It is expected to benefit as many as eight million individuals from the bottom 40% and M40 household groups.

The Malaysian Reserve previously reported that petrol dealers were still uncertain on the use of the petrol card mechanism for subsidised fuel for individuals outside the lower-income group.

The government had previously announced targeted fuel subsidy programmes which involve recipients of the Cost of Living Aid (BSH) who will be receiving the subsidy in the form of cash transfer, while non-BSH recipients will receive the subsidy via Kad95, set for implementation during the first quarter of 2020.

Kad95 holders will enjoy a fuel subsidy of 30 sen per litre, limited to 100 litres per month for cars, or 40 litres a month for motorcycles.

BSH recipients will receive a subsidy of RM30 a month for car owners or RM12 a month for motorcycle owners, where the cash will be debited into their bank accounts every four months.

It was reported that petrol dealers are still in the dark over the payment process for Kad95, stating there are concerns over the system as to whether the new cards will be accepted at the current terminals, or if they will need to instal new card terminals.

Similarly, stakeholders said they prefer direct cash handouts for subsidies instead of a petrol card mechanism, while one petrol dealer said cash transfer would mean little changes to the current system.

However, if payments are made using the proposed card mechanism, then there is a possibility that disruptions may emerge, therefore, there will be a need for a new machine, which may lead to system delays.