The decision to defer the implementation of the targeted petrol subsidy programme (PSP) has been made out of concern that floating petrol prices might impact the rakyat – especially those in the B40 group – by increasing their cost of living, according to finance minister Lim Guan Eng.

“That is why we are cautious about the PSP. That is what we want to discuss because flotation is expected to result in higher petrol price,” he said. Lim said consumers and even business people had voiced concerns about the effects of flotation of petrol prices, saying that even an increase of just one or two sen a week would have an impact, reports Bernama.

He added that the postponement will allow further studies to be done. “The postponement of the PSP implementation is to ensure that the people can better understand this programme, as it is meant to benefit the people especially the B40,” he said.

On December 30, domestic trade and consumer affairs (KPDHNEP) minister Datuk Seri Saifuddin Nasution Ismail announced that the implementation of the PSP, originally scheduled to start in January, had been postponed to a later, unspecified date. The decision to delay the PSP was made following a Cabinet meeting held on December 18.

Pending an official update that will be announced later on, the public will continue to pay for petrol following prices set by the current system, where RON 95 is fixed at RM2.08 per litre, while the price of RON 97 is floated (currently at RM2.63 per litre).

The government first revealed details of the PSP in October last year during the tabling of Budget 2020. It was announced that eligible B40 recipients – including those who are entitled for cost of living aid (BSH) assistance – would be given a fixed subsidy rate of RM30 a month for car owners, and RM12 for motorcycle owners.

At the time, it was also mentioned that the current price cap of RM2.08 per litre for RON 95 would be removed and the fuel floated – like RON 97 is presently – once the PSP came into effect.

Later on, the government extended the coverage of the PSP to include those in the middle income M40 group, with the issuance of a “Kad95” for those with household incomes of below RM4,000 but are not eligible for BSH. It added that RM2.4 billion was allocated to the programme, which would benefit around eight million individuals in the B40 and M40 groups.