The government says that motorists in the bottom 40 (B40) low-income segment are likely to receive their targeted fuel subsidies directly through their bank accounts, Bernama reports.

According to domestic trade and consumer affairs minister Datuk Seri Saifuddin Nasution Ismail, such a move would simplify the disbursement process, as 90% of the cost of living allowance (BSH) recipients – who are also eligible for the targeted fuel subsidy – are having their BSH deposited into their bank accounts.

The remaining 10% of the BSH recipients, most of whom live in the interior, will be assisted in opening a bank account, Saifuddin Nasution told the Dewan Rakyat. He added that the government will utilise the BSH data on the B40 group to identify targeted fuel subsidy recipients.

He was replying to a supplementary question from Bera MP Datuk Seri Ismail Sabri Yaakob, who asked about the method of disbursing the fuel subsidy and whether a card or coupons will be used.

Saifuddin Nasution said the use of a card as a means of identifying recipients is also being looked into. He said the card will also be useful when the government considers a targeted subsidy for other consumer goods in the future.

He said that when the initiative begins, there will be no change to the price of petrol at the pump, but the B40 recipients will be then reimbursed by having their subsidy banked into their account.

He added that the finance ministry has finalised the selection of a vendor to develop the system for the subsidy programme. The plan to switch 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.

The government says that 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. The targeted fuel subsidy mechanism is expected to be ready by July.