The announcement of a new fuel subsidy plan is not likely to happen anytime soon as the cabinet meeting to discuss the subsidy issues as revealed by Second Finance Minister Tan Sri Nor Mohamed Yakcop last week did not happen. Deputy Prime Minister Najib Razak told Bernama yesterday that several ministers were not able to make it to the meeting, and a few others requested that the meeting be postponed. The cabinet will meet again on this coming Wednesday, so let’s hope the discussion happens this time.
Second Finance Minister Nor Mohamed Yakcop mentioned earlier this week that the subsidy pan will be unveiled before the Budget 2009 meeting, which will happen on the 29th of August 2008. This means the new subsidy plan will happen anytime within the next 3 months.
In other fuel related news, the Domestic Trade and Consumer Affairs Ministry (DTCAM) has released a letter stating that a ban on selling fuel to foreign cars will only come into effect next week instead of yesterday, and it would only apply to the northern area within 50km from the border. The ban down south 50km from the Singaporean border will only start on the 9th of June 2008.
More after the jump…
I have been thinking and maybe a subsidy card-based solution could be used. Limit the amount of subsidised fuel that can be purchased by a person every month to say, RM300 a month. If you use more than this, you pay market price. This should take care of the majority of low income earners who do not spend that much on fuel every month.
To prevent a high income earner with multiple family members or friends from applying for multiple subsidy cards to enjoy more subsidies, only the car owner should be allowed to apply for the card. Just pass it around to whoever’s driving the car at that time.
Motorcycle owners can apply, but the amount of subsidised fuel allocated will be much lower, appropriate to how much a motorcycle uses. By tying the issuance of a subsidy card to vehicle ownership, the government can even deny the owner of an expensive car a subsidy card. Just have one fixed amount of subsidised fuel to allocate for cars, and one for motorcycles. If you are eligible for subsidised fuel but have to use more than the reasonable allocated subsidised fuel each month, you just top up the balance of what you need to use at market rate prices. This encourages people not to waste fuel as excessive usage will have to be paid for at market rates.
Does anyone see any problems or holes with this idea? I can already think of one. A high-income person with an expensive car may think of buying many cheap and old second hand cars to allow him/herself more subsidy cards to be used to pump fuel for an expensive car. I am not sure how to go around this. Maybe limit the amount of subsidy cards that can be held by a person, but that would be a problem for a dad who needs to apply 3 cards for himself and his 2 children who drive cheap second hand cars that are registered under his name. Of course, he could just have the cars registered under the children’s name instead.
Any ideas? Please tear the idea in this post apart and improve on it, or suggest your own ideas, anything – let’s make this a fruitful discussion. For things like company cars, fleet cars, and etc I really have no idea at this point on how to tackle it.
Taiwan also faces fuel subsidy problems as we do, and on Wednesday hiked prices of petrol up by 13% and diesel up by 16%. Petrol in Taiwan now costs 33.9 Taiwan dollars (RM3.57), up from 30 Taiwan dollars (RM3.16). According to the Taiwanese government, this hike only covered 60% of increases in crude oil prices, with the remaining 40% to be split evenly between the government by reducing fuel taxes, and the state-run petroleum company CPC Corp.
The Taiwanese government will be subsidising the island’s 90,000 taxis by providing subsidised rates for the first 450 litres used per month. This is somewhat similiar to the idea in this post, except we have to figure out how to allocate those subsidised litres effectively. Taxis are easy – just one taxi per taxi driver and no need to differentiate between the rich and poor.
It’s actually really hard to imagine any kind of fair subsidy control being implemented when the government cannot even stop people from littering or pasting up illegal advertisements all over telephone poles and etc, but maybe when money is at stake things will be different.
UPDATE: Someone close to the cabinet committee enlightened me on one factor that I think alot of us all missed – time and cost forimplementation. Any form of card-based system will take a long time to implement and involve investments. Who will bear the cost of installing the card reading machines etc at the petrol stations, the petrol stations or the government? How will the government handle the processing of subsidy cards for every single eligible person in Malaysia, etc. A subsidy system that uses a card or something similiar will put money into the hands of the IT industry, perhaps unnecessarily.
A cash-based subsidy system where subsidy money is given directly to those that meet the criteria of eligibility of subsidy is much more cost-effective and can be implemented much quicker.
Looking to sell your car? Sell it with Carro.
interesting.. but some points to ponder here.. how do you define expensive? based on brand? or based on price? what if someone buys a second hand expensive car?
or should we look at the person’s salary to determine how rich he is to live without fuel subsidy?
Paul,
On this suggestion:
The Taiwanese government will be subsidising the island’s 90,000 taxis by providing subsidised rates for the first 450 liters used per month. This is somewhat similiar to the idea in this post, except we have to figure out how to allocate those subsidised liters effectively. Taxis are easy – just one taxi per taxi driver and no need to differentiate between the rich and poor.
I see one weakness, if only the difference between the subsidized and the unsubsidized is really small it will work, otherwise the taxi owner will make easy money by selling the 450 given liters to others. Simple calculation:
Subsidized price is RM1.92
Unsubsidized price is RM 3.57
Difference is RM 1.65
If a taxi owner sell the 450 subsidized liters at RM1.60/L
Heavy usage user will be buying the subsidized rate from the taxi owner
He/she will make RM720 by goyang kaki
It will be similar case to the fisherman case where they sell the subsidized petrol to other fisherman. (not sure whether this is true or untrue, correct me if I am wrong).
The same thing will happen if one is given a RM300 subsidized petrol. The calculation is as below.
One will buy a second hand and very old car for a very low price
He/she will sell his RM300 subsidized petrol at RM250
Somemore he/she might use his/her relative name to buy other old car and still get RM200 per car (RM 50 will be given to his/her relative)
Heavy usage user will buy the subsidized petrol
If 5 old cars, he/she will make RM 1050 per month
The problem is with the implementation. Petrol station owners wouldn’t care much about who is the owner of the car and who is the owner of the subsidized card. As long there is someone wants to buy their petrol they will sell it.
Even if the subsidized petrol is embedded in the myKad. These Banglas wouldn’t care much identifying the myKad and the owner of the myKad. Other than that there is still problem reading myKad. Some card reader still has difficulty reading it, and myKad is also prone to get scratched on the chip surface. So sometimes it is very difficult to read the myKad.
Nevertheless it is still a good idea Paul, it just need some minor improvements to find any other loop holes.
My question is. How on earth such an important meeting for the sake of the country, some of the ministers cannot make it? Pelik.
i would have to say that I agree with Pau. for me the most viable solution right now would be a card based solution and to limit the purchase of subsidized fuel. I mean it’s a known fact that we can’t be living on subsidized fuel forever, so having Malaysian citizen some sort of limit on the purchase of subsidized fuel would help us going towards no subsidy in the future.
anyway, yes I agree that there would be may loopholes that people can exploit. but hey, tell me 1 solution that’s perfect, there’s none. i guess tying the amount of fuel and level of subsidy to the income would also be a good matter. besides, limiting the number of cards for a family would also help curb those Mat Rempit/illegal racing activities as now that fuel is getting more expensive, I think they would think twice before refueling to go racing
even though after this maybe it would be a bit of a hassle for us to buy cheap fuel after the implementation, i think it should be worth it. i mean, whoever’s willing to go through the extra hassle pays cheap for fuel while those who just can’t wait have to pay the real price. i mean the same thing is going on in the States. in a certain place, the petro price differs from station to station, so u can get cheap fuel if you’re willing to look around over there
there are many ways to do away with fuel subsidies and hopefully the government would take actions that would benefit the rakyat. else maybe we can show them something in PRU 13.
great idea Paul, to overcome with implementation problem how if…
1. “no cash transaction” – all purchased will have to be done using prepaid card – so it doesn’t matter who use the card, as card value is limited. To apply for cards, owner need to have his name on Registration card and driving license.
2. “stick subsidy to a person with vehicles and license” – so 1 card for a person, and you only need 1 vehicles to move you around anyways, doesn’t matter how expensive the car value is (which is very subjective). – this will prevent people from selling their cards, as it would deny them the subsidy.
This will encourage people to plan their journey ahead, i.e motorcycle for work, large MPV for weekends (less traffic less fuel)
2. “company are not allowed to apply unless its a transport company”. yeah everyones knows that a lot of people are registering their luxury cars to the company, why should they allowed to do so?
3. “Taxis, lorries and other transporter” will stick their subsidy to their special license to transport.
the thing with petrol subsidy is – IMHO everyones are entitled to receive some of it. you only promote abuse if you tried to deny the rich from getting it
my unworthy 2 cents
is buying a car for the sake of saving a tad on fuel costs for the expensive car is that much worth it? let’s say 40 sen over subsidized fuel, u save 0.40x80Lx4weeks/monthx12months/year = so u save rm1536 per year just to avoid the subsidy limit.. does that account to savings over a used car price + road tax + space waste? imho, i don’t think that’s a smart idea.. unless the unsubsidized price is really significantly different than the subsidized fuel price then my statements would change..
just a very very rough suggestion.
yes we need card system so every transaction can be recorded.
put any reasonable and affordable subsidies and let the price increase, off course not based on the current market price. (I seen RON95 in Bangkok last week cost about BHT 40+ = RM4++)
at the end of the day, government can based on the annual income, maybe through income tax system or EPF system, to reimburse back to peopple at certain amount as according to a rate system.
So this is much easier to gauge on the people ability/affordable, and to match also on the annual income reported to IRD.
The income income u get, u more the higest price. The less income and more reimbursebent u get.
sorry, the last sentence should be:
the higest income u get, the more you pay for the petrol. For the less/lower income people, you will get more reimbursement.
a good card system need to be implemented.
hmmm… IMO, it’s a good idea Paul… it’s detail enuff but a lil bit complicated… the problem is how G will differentiate rich & middle/poor earner in a short time frame (the fuel price is rising fast & they need to act quickly)… & how to apply for the card? need to bring all those salary slip, car H-P aggrement? will need to fill some form & do registration?RTD will be issuing the cards or other department? there will be some sort of comotion if everyone rushing to get the ‘card’ plus all those registration ‘nightmare’…
i think we need a more simpler & fast way to make this thing work… here goes..
1)everyone with a valid driving licence will be given 1 fuel subsidy card. RTD will prepare the card & everyone have to go there to collect. The reason is that for G to keep track and make sure that everyone only get 1 card each. No need registration or whatever, just bring your driving licence, they will check if you’ve already collected the card or not before hand over the card.
2)the card is a simple card with a fuel limit (maybe 450liter) for 1 month. Meaning that everyone can only get 450liter of subsidised fuel per month. More than that, they have to pay the ‘real’ price. But the card must be able to be use for a much longer time (no point if it valid for 1 month and need to go to RTD again).
3)All petrol station must have the card reader & no need to install in each pump. Must consider them too, cheap for petrol station’s operator to install. It’s a simple mobile reader (like the Mykad reader maybe) that read the card balance subsidised fuel & date. Say if this month you already reach your limit, the card will automaticly store the date of your last subsidesed fuel purchased. Next month when u want to purchased subsidised fuel, the card read the current date & compared to your last purchased date, if it the 1st time that month so u can automaticly get 450liter top-up.
4)No need to differentiate rich,middle or poor as everyone get 450liter subsidised fuel, equal. Most of the rich ppl use higher capacity vehicle anyway & the logic is that they will most probably reach the subsidised limit faster. I know a 2.0L Perdana is way cheaper than 2.0L Merc/Beemer and we should somehow differentiate this ‘user’ as they are not in the same income group, anyway, it’s not a perfect plan but it’s a fast plan & will promote user to use lesser capacity vehicles.
5)Some may say, i can give to my relatives for them to use but hey, it’s a limited subsidised fuel, the most u can give is 450liter and it was supposed to be used by u anyway, whether u use it or not.
6)I can see some rich dad ‘rushing’ all their teenage kids to apply for driving licences to get more subsidy card. This is the major problem. But most of the kids from richer family have their own (gift from dad) car, so they will use it (the car) anyway, so it’s fair enuff if they also get the subsidised fuel. Not like “Dad” will use all or their cards for himself. The problem is that most likely the middle to lower income earner (which may get more cards via their kids) but can’t afford to give them cars. So they can use more card with 1 car. Worse is that if they start ‘selling’ the fuel.
Hmm… don’t really know if it will work but as Paul said- “let’s make this a fruitful discussion”
eh.. why my comment can’t be up-load?
hmm…
IMO, it’s a good idea Paul… it’s detail enuff but a lil bit complicated… the problem is how G will differentiate rich & middle/poor earner in a short time frame (the fuel price is rising fast & they need to act quickly)… & how to apply for the card? need to bring all those salary slip, car H-P aggrement? will need to fill some form & do registration?RTD will be issuing the cards or other department? there will be some sort of comotion if everyone rushing to get the ‘card’ plus all those registration ‘nightmare’…
i think we need a more simpler & fast way to make this thing work… here goes..
1)everyone with a valid driving licence will be given 1 fuel subsidy card. RTD will prepare the card & everyone have to go there to collect. The reason is that for G to keep track and make sure that everyone only get 1 card each. No need registration or whatever, just bring your driving licence, they will check if you’ve already collected the card or not before hand over the card.
2)the card is a simple card with a fuel limit (maybe 450liter) for 1 month. Meaning that everyone can only get 450liter of subsidised fuel per month. More than that, they have to pay the ‘real’ price. But the card must be able to be use for a much longer time (no point if it valid for 1 month and need to go to RTD again).
3)All petrol station must have the card reader & no need to install in each pump. Must consider them too, cheap for petrol station’s operator to install. It’s a simple mobile reader (like the Mykad reader maybe) that read the card balance subsidised fuel & date. Say if this month you already reach your limit, the card will automaticly store the date of your last subsidesed fuel purchased. Next month when u want to purchased subsidised fuel, the card read the current date & compared to your last purchased date, if it the 1st time that month so u can automaticly get 450liter top-up.
4)No need to differentiate rich,middle or poor as everyone get 450liter subsidised fuel, equal. Most of the rich ppl use higher capacity vehicle anyway & the logic is that they will most probably reach the subsidised limit faster. I know a 2.0L Perdana is way cheaper than 2.0L Merc/Beemer and we should somehow differentiate this ‘user’ as they are not in the same income group, anyway, it’s not a perfect plan but it’s a fast plan & will promote user to use lesser capacity vehicles.
5)Some may say, i can give to my relatives for them to use but hey, it’s a limited subsidised fuel, the most u can give is 450liter and it was supposed to be used by u anyway, whether u use it or not.
6)I can see some rich dad ‘rushing’ all their teenage kids to apply for driving licences to get more subsidy card. This is the major problem. But most of the kids from richer family have their own (gift from dad) car, so they will use it (the car) anyway, so it’s fair enuff if they also get the subsidised fuel. Not like “Dad” will use all or their cards for himself. The problem is that most likely the middle to lower income earner (which may get more cards via their kids) but can’t afford to give them cars. So they can use more card with 1 car. Worse is that if they start ‘selling’ the fuel.
Hmm… don’t really know if it will work but as Paul said- “let’s make this a fruitful discussion”
Reduce the car tax and impliment pay as you use system.Anyway M’sia will be petrol importer by 2014.So ask ourself be prepare for the future.Also reduce income tax to balance fuel hike.We pay big amount of our income to car loan.I only use the car for go to work and back so fuel hike and pay less for car installment sound plan.
Will it cause riots when the subsidy applies more to the poor and less to the rich? Rich and poor is oso paying tax to government. Both are still Malaysian. When there’s a plan to differentiate them, this means we already have layered in our citizenship. I don’t think this is a good idea since it’ll burst some dissatisfaction in between Malaysian. Will it then make Malaysia become another Indonesia?
Since we all arguing on the subsidy problem. Just think of Singapore or Thailand. Their country is much more well developed and still staying good even without subsidy from government. Why we r here still shouting how much we should get subsidy. Malaysian too pampered?
450 liters a month is too much, that figure was for taxis in taiwan. realistically it should be maybe 150 to 200 liters.
If Malaysia really want to improve in this area. Should encourage more Hybrid car. So far I just see Civic has the Hybrid in Malaysia and the price is too ridiculous + I never ever seen 1 on the road moving as it’s been launched for quite sometime.
jolly_iddiot you reminded me of the rice in Thailand.
Thailand is the biggest rice producer/exporter in the world, and still Thais need to buy rice at international market price!
So we all malaysian should never think of Malaysia is the oil exporter and automatically we will get cheaper petrol. It same like a father earning money and the father has the right not to give the money to his children automatically!! Children need to think of themselves to survive and not waiting for his father money.
I think the best solution for the govn is to do away with the high car taxes in Malaysia and remove the fuel subsidy at the same time. That way, a salary man will not have to carry the burden of paying so much tax for a car and paying high prices for fuel at the same time.
It would also give the govn less headache of working out a suitable subsidy plan. I believe this is a win- win situation for both parties.
What do u think??
Allocation based on licence and car registration card? Remember some cases involving cars which has been written off but then re-appeared as kereta potong, complete with puspakom seal of approval?
Bolehland is full of geniuses who made us famous worlwide with the credit card and ATM card clones, in east malaysia now u can even get MyKad clones these days..
Rich and poor? How? Is it that easy to divide? Based on salary? For example, even small pasar malam traders or food vendors actually can earn more than a proffesional with a fix salary… And does anyone really believe that ALL of them will declare their income every single cents and pay their income tax each year?
The poor can be subsidized or help in many ways other than through petrol subsidy. And if u think about it, if someone is poor or having a `low income’, buying a car should be the least of his/her priorities.. Car ownership is not cheap, monthly installment, maintenance, insurance etc..
The term low income itself is very subjective, in KL say if u earn 2K a month with 3 kids is not the same if u stay in Maran, or Tangkak.
Championing for the `low income and poor’ cud be another strategy in winning votes.
Sorry for being negative, but i believe in pay as u use. malaysians have to except whatever it is, the price of oil has risen and we have to pay more for it.
The G can help the WHOLE rakyat through other incentives like TOLL issue, tax and duty of cars, etc..
Im sick thinking that at this very moment, sumwhere around the border or in seas, smuggling syndicates were pouring subsidized diesel or petrol happily…
The real solution is really to move to an open market and completely remove fuel subsidies gradually, maybe in 6-8 months time frame. Meaning every 6 months or so the subsidy is slowly removed. Crude oil prices which some analyst predict might even go up to USD200/barrel IIRC, is going to be a huge strain on our country’s budgets. Subsidies will create a very inefficient economy for us Malaysians.
Will this make everyone happy for both lower and higher income groups? Of course not as we Malaysians want to maintain our comfortable life. But by removing inefficiency in this area, efficiency in other areas improve, for example, better public transport (which should be subsidized), lower traffic congestions, strategic lifestyle changes (moving closer to workplace), car pooling, safe efficient driving, etc.
Card system as Paul suggested introduces another layer of inefficiency. If I have leftover fuel from below quota usage, I’ll just sell that off to someone else. Subsidies comes from taxpayers money anyway, we’re just (trying to) redistributing the wealth from the rich to the poor. Revamp the income tax system if needed. The money is better used elsewhere than fuel subsidies.
Subsidies only work if you’re trying to benefit a certain group of people, say the extreme poor, by transferring/allocating some income from the rich to the poor. This helps eliminate large income gaps where the rich get richer and the poor gets poorer. To subsidize all Malaysians is pointless. A revise of our income tax system is a better solution. Income tax fuel rebates for the poor for example.
Another comment on high car tax as some of you have mentioned:
Wiki excerpt:
“Insofar as they are inefficient, however, subsidies would generally be considered by economists to be bad, as economics is the study of efficient use of limited resources. Ultimately, however, the choice to enact a subsidy is a political choice. Note that subsidies are linked to the concept of economic transfers from one group to another.”
Subsidies, regarded as protection from the government is always generally inefficient. High car taxes in our country is simply another form of subsidy, in this case to protect our local car manufacturers, more specifically Proton. We are encouraging local car sales vs. highly taxed imported sales.
No need for those card or any card reader dear fellow. It is a waste of money. Just sell non subsidies fuel at pump. Give cash to all 18 years all above at about RM600 per head credited into account. The one who use smaller cars or public transport will have a huge impact on this system. Whoever clever enough will resorted to cycling in short distance travel. The G just need around RM40 billion for this purposes. After that, never ever increase the RM600 cash year after year. Our rakyat must be responsible enough. just look at how many lorry, and cars left idle while the driver do anything else. This is a complete wastage. Then, the excise duty on all vehicle and insurance will be reduce substantially following the moves. In this case, there will be never be any ‘salah guna’. Simple solution, low cost. TQ.
Just hope that the government implement the policy without any BIAS. irregardless you are from any race, religion, or whether you have relationship with any politicians or Minister, every Malaysian enjoy the equal subsidies.
I prefer the idea to allocate subsidies fuel limit per mykad per month. To enjoy the subsidied fuel, you have to swap you mykad at petro kiosk. Once the monthly quota used up, you have to pay for the market price.
i’m not agreeing with the idea of giving cash… it will not DO what it’s supposed to do i.e to pay for petrol, ppl will use it as they please & trust me this rising oil price issue will not stop here… it will keep going up & ppl will complain again & again & again… u can’t tell Malaysian that we give this amount of money & never increase again, they will ask for more… same as COLA issue etc..
btw, it’s ridiculous if the subsidies fuel being allocate differentially amongs races… it’s like selling a much cheaper ‘roti canai’ to Indians but Malay & Chinese must pay higher price… we all eat roti canai la, same as fuel, we all use it… pls G don’t even think to do this way…
p/s: Paul,150-200 liter just too little loh, on average i spend $10k plus for fuel anually, last year mine almost $12k, that mean 500liter plus..it’s normal or my consumption above average? btw, I’m not a taxi driver.. LOL :)
why dont they make use of the MYKad? idiot gov!
i would also strongly suggest that, pump stations to allocate different pumping machine for foreign vehicle! it easieer to manage and control! regarding taxis, they should have different fuel station for public transport! and make sure no subsidy for foreigners as well!
200 liters = 50 liters a week or 1 full tank a week, i think thats more than necessary for basic necessities in using the car. more than that, should pay market rates.
Someone close to the cabinet committee enlightened me on one factor that I think we all missed – time to implementation. Any form of card-based system will take a long time to implement, involve lots of investments, such as who will bear the cost of installing the card reading machines etc at the petrol stations, how will the government handle the processing of subsidy cards for every single eligible person in Malaysia, etc. A subsidy system that uses a card will put money into the hands of the IT industry.
A cash-based subsidy system where subsidy money is given directly to those that meet the criteria of eligibility of subsidy is much more cost-effective and can be implemented much quicker.
The only way I see is to remove subsidies, but with that the economy will come crashing down. The same thing will cost 3 or 4 times more in future. Having subsidies based on group works, but its hard to implement and hard to monitor.
Firstly, a rich person go buy cars all registered to his son or whoever unemployed in the family. You cannot prevent an unemployed/self employed to not owning a car. The problems that the new system will face is actually a lot similar to the way people evade income tax. Lawyer earning 30k per month woks in own firm can say only earning RM300. The money is paid to the company, which then pays to the employees (this case family). So you get taxed less compared if you get your money straight on.
How about:
1. Charge all foreign car plates who enter Malaysia market price of oil. That will curb them from literally stealing our oil. Only problem is that, they go kau tim the petrol station kiosk to selling them the cheaper rate. In fact, if this new method is done, I can see a lot of petrol station owners being richer than normal. Just give RM10 or so,then ask owner to adjust la pump give subsidy rate for filling a bus for example. Enforcement cannot come from petrol station kiosk, it has to be done by centralised. Only problem is that how to manage the tons of vehicles which go to the pumps?
Maybe, Cars could be fitted with GPS or something. If Singapore can have that Gantry system where people just drive thru instead of paying toll, why not have the same thing in Malaysia? Put some sort of device monitoring type of car. Only other problem is that now people are being watched.
There is really no simple solution to this. If the gov being emo then they say, no more AP, no more duty/import tax. You want cheap car, we give you cheap car. Also no more subsidy for petrol All open. I can imagine the economy collapse because of this move….
if everyone has the same quota, then i believe the impact is big…
house properties appreciation rate will change… for example, KL-Damansara-Bangsar areas will increase even more quickly, while places like Kota Kemuning, Puchong etc will rise slower…
this is becoz of traffic jams and work opportunities… ppl do not want to stay too far from where they work…becoz instead of the time factor, now cost factor as well…imagine if i work in KL and stay in Klang, i might use 60 liters per week… if i shift to a house within 5km to office, i can use 10 liters per week… and i can sell the 40 liters to my housemates/colleagues for my income, u see?
We have to eventually realise that pouring in so much money into petrol subsidies is ineffective use of govt resources. Pay as you use is the only way to go. This will encourage more prudent use of vehicles,carpooling and public transport etc. Use the billions saved for development, healthcare,education.Whatever mechanism you come up with to distribute the subsidies people will find ways to cheat and profit from it.
why dont introduce One card/introduce Mycard feature that will be use for multiple subsidy. So it become standard to all of us.I believe Petrol is only one thing that we could think now. In india, they distribute food coupon . u could use at any/only restaurant .
Q:How to load subsidy to the card?
A:Go to bank,post(so have to pay change to bank too lah,ofcourse lah, nothing free lah. Or maybe u could load after u pay road tax.
I dont mind any croni politc/team want to get contract to process/server for all subsidy, as long as they deliver it to me.
should be jus like the road tax….bigger engine capcity the bigger the tax…thus less subsidy…but how it should be implemented is anybodys guess….and to be honest,,,as mentioned above…thrs no one system that wil please everybody…..
Paul,
Fuel subsidy system should be simplified and given to targetted group of people. The targetted group should only be Malaysian vehicle owners. Those who don’t own any Malaysian vehicle are not entitled to subsidy.
So, the target groups are the Malaysian vehicle owners, and JPJ controls the database of vehicle owners. To simplify the process, I have the following suggestions:
1. Pump price will be the full price without subsidy, so that non-vehicle owners like factories cannot buy subsidised fuel.
2. Based on the average fuel consumption per vehicle per year, define the fuel subsidy for each category of vehicles, use the ‘mean’ FC figures as benchmarks. There should be 3 categories: Motobikes, passenger cars and commercial vehicles. For example RM 200 per year for bikes, RM 2000 per year for a car, RM 3000 per commercial vehicles per year. Upon renewal of road text, owner will provide his bank account number for JPJ to credit his account. Vehicles more than 25 years old needs Puspakom certification for road worthiness. JPJ only need to link up with banks MEPS system. This will be greatly simplify the disbursement process, encorage people to pay their road tax. Gov can also better control the amount of subsidy. People pay more if they use more. People pay less if they use better fuel efficient cars. Also good for environment as well. Non Malaysian will not enjoy the subsidy. No more smuggling of fuels to factories, cross-borders.
Just my 2 sens worth. Cheers!
The entire plan for rich/poor or card based system is ridiculous.
There can never be a perfect solution.
So how about government employs those things and then the fuel price rocketed to USD 300 per barrel? So it become unbearable for the G then changes the plan again?
Like it or not in future we all have to pay the full price.
So the best solution is.
Take off the subsidy and abolished tolls and reduce car price and tax.
Then we all can start talking about the permanent long term solution for future like hybrid, fuel cell and solar system etc.
Any attempt to reduce subsidy, how sound it might seem (from economic point of view) is a political suicide. Even attempt at moderation (prior to PRU12) has been disastrous. Will the move be easy to take by the govt? We have seen street demonstration in Indonesia/Thailand and many EU countries, demanding fuel subsidies.
The best option may be to STOP the war in IRAQ and reduce unrest in Nigeria then price of oil will stop increasing, This will also will by time for hybrid cars and alternative fuel based vehicle to come into production.
Hi Paul, my ideas are (as posted in my blog talkonlymah.blogspot) :D
(1) Cut the Bleeding Arm
The quick fix for all the petrol smugglings, inappropriate consumptions, & you-name-it ..etc. : START SELLING AT NON-SUBSIDIZED PRICES. PERIOD. Don’t curse me yet. We need stern policy to get things right top-down. Do it the decisive way. Clean cut, bukan soap opera. (OK, enough). WIth this, lots of administrative works of government will be reduced too, not only the subsidies to those non-entitling parties (sorry to my Singaporean friends loh).
Brilliant right? Now Malaysians will finally realise petrols are precioius. Wastage will be reduced naturally. Probably Malaysians will be more healthy, walk more drive less mah.
(2) Rewards and Penalties
When (1) is implemented, lower income people with own transports will be affected, immediately. To solve this problem of short-term shock, a immediate subsidy should be provided to those entitling vehicle owners directly, eg. Check , direct bank-in, and etc. Comon, you know where to send the Speeding Ticket, then you should know where to send us the moneyyy. JPJ have our records, IRD have our records, blah blah blah. Of course, a careful formula need to be worked out on deciding what type of vehicles entitling to what amount of subsidies. And I do suggest 2.0L and above, get Zero subsidy. 3.0L and above, get to pay additional for Luxury Tax. (or even make it illegal to own 3L car, I don’t care). Now you like me better? And I assume you don’t drive a Hammer, do you? kekeke. For mid to long term, integrate this whole thing into the income tax form, like adding a row for Petrol Consumption Rebate. Likewise, for the manufacturing / transport industries, tax rebate as subsidy.
(3) Let them Dog Eat Dog for Malaysians’ sakes
This is the best part, I love this. Now petrol stations sales will be affected, how to attract customers? Cut your prices lah. Cut your margin, hire less workers. Easy licenses don’t mean easy money OK. Walk an extra mile, won’t you? (err.. I should start marketing electric fly swatter to those petrol stations taukeh..) akekekek.
I think it’s best to remove the subsidy all together at the pump or point of purchase. That means everyone pays full price when buying. Then reimburse each car owner a reasonable fixed amount via direct deposit into EPF monthly or even refund through income taxes annually? Company owned vehicles can probably get refund in business taxes, this is one way to subsidize without too many overhead of implementing subsidy card system etc.
i agree with mr benjo. i think that we should work towards a long term soultion. eventually, those ppl in the G will abolish the subsidy in the name of greater developement, a great b.s. that we are all expected to believe. so they should abolish toles and work towards promoting more efficient cars, or alternative forms of fuel..
sorry its ‘solution’ and ‘tolls’…
tommy73,
If you based the subsidy on road tax, then there might be somebody who renew road tax of their “already scrap-metal” car just to get the money. So they might need to bring the car to JPJ. And we would also need to limit one claim per person regardless of the car they own.
osh_kosh’s proposal would cost some money, and would take modification and time to implement.
I would propose linking the subsidy to our income tax. I had put in in more details in my blog at pencadang dot blogspot dot com
my 2 sen.
If it was implemented in form of a card…then imagine this..
The petrol station owner will purchase the fuel from the deport for unsubsidized price…
Then the customer will come to the petrol station…swept the subsidy card and pay based on the subsidized price..
In this case…the burden will be felt most by the petrol station owner…for they have to spare a lot of money to purchase the unsubsidized fuel..only to collect lesser for the fuel purchased by their customer based on subsidized price..
of course the government gonna pay back latter to them…but this will only increase their working capital..
i think it is better for the government to pay cash directly to the citizen..in this case it will be fair to everybody…
Just provide the separate pump’s lane for (i) car below 1.3cc(subsidies petrol) (ii) anything above 1.3cc (without subsidies).
Therefore, those low income group can benefit from the arrangement.
Hey, everybody is talking about changing to a new system. The existing (present) system still works. No card is used, no cash rebate to be paid. So no need to pay extra cost to IT industries, extra burden for infrastructure investment, extra works for IRD, JPJ and the Gov. Just plain and simple.
Now the price is 1.92 for RON 97. Slowly decrease the amount of subsidy over a period of time. For example, the subsidy decreases by 5 sen every month. This month, a liter costs 1.92, next month, it will be 1.97, then 2.02 and so on. Until we reach market price. This gives a clear time and direction to everybody. There will be less market reaction panic and it gives sufficient time to everyone to adapt.
Since no new infrastructure (ex. mycard reader’s kiosk) is involved, there is also no wastage when they are no longer needed once the price reaches market prices.
By the way, not selling the subsidized fuel to foreigner should be implemented immediately. No compromises on that.
give subsidy according to salary range or based on income tax details and align with car ownership…..the more u earn the less the subsidy u got….no transport no subsidy for fuel…..(but maybe get some subsidy for travelling in public transport)
rebate on income tax..
during submission of the income tax..
but also be fair to who already sacrifice buying house long way from KL due to lower price of the property.. people like me staying in shah alam (puncak alam) but working at KL.. use more oil than those who stay at bangsar..because we can’t afford to have house at bangsar or KL nearby
I believe in free market. Actual prices for everything. What’s the real price for fuel? We better gradually raise to that price whithin these 12 months because if the gov reach it’s limit in sustaining subsidies, the price will be too high and it would be quite a shock for mid to lower income group.
So I say free market. Actual fuel prices and actual motor vehicle prices. Road taxes absorbed by fuel companies. More people can afford hybrids, and of course more hybrid models.
but still don’t think hybrid car price will go down less than rm50k..
may be proton can think something.. :D
Well, this mostly will impact majority on normal income people not those Rich people. Why? How many of those Rich people car was register on they own name include those big luxury car?
Example:
People whose “Makan Gajiâ€, you can’t reduce your income tax for you patrol & toll, so you still need to pay what ever rate you have on income tax. Salaries increase Tax increase too.
People who hard working is to get better life style include driving they dream car, end up in Loss situation.
Car registered under Company: Patrol reduce from Company Tax, it also transfer the patrol price to consumer as well. It become Rich people more rich. And “G†lost as well.
Perhaps “G†shall fixed the patrol price across everyone and also reduce the income tax rate from 28 to 27% or even lower, than increase the RM2400 to RM3600 or higher not require to pay tax. Some more what the % of people who income lowers than RM2400 own the car and used it frequently?
If implement those so call card system, it eventually with become a victim for crime. Without car it means you are in middle or higher end people.
If implementing on MYCARD, you bank or Tax info with knowing by someone who have the reader in hand
If implementing base on car modal, this will even good. Believe majority here do notice that some M’sia make car eventually didn’t equip with original type of engine. Example: A Kancil could is having Turbo DOHC engine, so will this consider as what Cc? Car been modified to racing, with they consuming less Patrol than rest?
I was thinking all M’sian all the same & shall treat all equivalent not matter you are race are, just fixed the standard across like other country as believe we didn’t want to be a victim for crime.
agree with u jo,
increase to 4000/month should do better..
My point of views:
Agreed to remove the subsidy system gradually but how?
1. G adjusts the petrol to market price but with a rebate to the car owner (who contribute to Malaysia Economic scale) via EPF account / personal or company tax.
2. How G to subsidy the petrol? Fixed the maximum subsidiary to the any model of car. For eg, assume monthly max is 200L and 2400L/year. If G subsidy RM1 per L, that’s mean have to rebate RM2400 to the car owner. If the car usage is more than 2400L per year, then have to pay accordance to market price. Used more pay more, fair!
3. JPJ should come out a card system link with road tax for recording the petrol usage and rebate accordingly annually.
4. For long term, G can increase the petrol accordance to the market price without increase the subsidiary.
5. To create a win-win situation in long term, G should open up the free trade to automotive industry. Rakyat get cheaper car, but pay higher petrol. By boom up the automotive market, the traders can eventually bring in more economic fuel car into Malaysia.
6. Recently G is prohibited the foreigner car to pump petrol within boarder 30km~50km. Don’t you think it showed that how “smart†our G is? Singapore charge foreigner car of SGD20/entry. Why our G cannot implement the same system like that? By charging maybe RM45 per entry (consider as petrol tax to foreigner car), can at least stop those foreigner cars that purposely come to pump cheaper petrol here! For those foreigner who driving to work in Malaysia (who also contribute to Malaysia economic by paying tax) who can waived to pay the entry charge by link to their employee pass.
for foreign car enter to M’sia , impose fuel tax on it, for example a car model with 45 liters of tank, the fuel tax will be 45L x price of non subsidy petrol.(45L x RM 3.104 = RM 139.68) even the foreign car owner pump in full 45 L at subsidy price of RM 1.92 , he actually buying at RM 5.024/L (RM139.68{fuel tax } + 45L of petrol x RM 1.92= RM 86.40, total foreign pay for 45L petorl is RM 226.08)
this method will need less man power enforcement at kastam at boarder only.
GOT HEADACHE ALREADY READING ALL THE COMMENTS!
LETS LOOK AND SEE WHAT THE G IS OFFERING THEN WE COMMENT ! OK…………..