The new targeted fuel subsidy mechanism will be ready by July this year, at the latest. Domestic trade and consumer affairs minister Datuk Seri Saifuddin Nasution Ismail said this allows the government to identify the vendors and fine-tune the list of deserving recipients, Bernama reports. “Q2 2019” was previously mentioned, so should there be a delay, it will be a small one.

“When the MoF (ministry of finance) has chosen the vendors, they will inform our ministry, enabling both ministries to work together to update the related issues. This is because we want to make sure the programme runs smoothly. The most important component is to ensure that the list of beneficiaries is reliable,” the KPDNHEP minister said.

“The list is being prepared by 17 agencies, not only the Inland Revenue Board, the Registration Department and the Road Transport Department, but also other agencies as well. We want to do a crosscheck to ensure that the recipients are really qualified and we need a bit more time for that,” he added.

Yesterday, Saifuddin’s deputy mnister Chong Chieng Jen said in parliament that no final decision has been made on the mechanism. “The subsidy system must be simple to use and can be used by all petrol stations throughout the country,” he said.

The plan to move from blanket fuel subsidy to targeted subsidies for the B40 group was announced by finance minister Lim Guan Eng in Budget 2019. The mooted plan was to offer subsidy of 30 sen per litre up to 100 litres a month, for cars with engines below 1,500cc. Motorcycles with engines below 125cc will get 40 litres of RON 95 a month at the same rate. Owners of multiple and “luxury cars” will not be eligible, although the definition of the latter wasn’t determined.

RM2 billion has been allocated for this new initiative, which is expected to benefit more than four million car owners and 2.6 million motorcycle owners. As for those who won’t be eligible, the government has said that it will ensure that the increase in RON 95 petrol prices will be gradual, once the price is floated.

“Let’s say on the first day of implementation, the difference (between controlled and market prices) is 30 sen (per litre). We don’t want that. Even though the price must go up by 30 sen, it should be gradually over a set period – say six to eight months,” domestic trade and consumer affairs minister Datuk Seri Saifuddin Nasution Ismail was previously quoted as saying.

Currently, the RON 95 petrol price is being capped at RM2.08 per litre, while RON 97 is sold for RM2.46 per litre. Diesel is also at its maximum capped price of RM2.18 per litre.