The Federation of Malaysian Consumers Associations (FOMCA) has said that removing the current blanket fuel scheme amid the rising cost of living may backfire and result in higher inflation, according to a report by NST.
FOMCA CEO Saravanan Thambirajah explained this was because suppliers and traders were extremely sensitive to fuel prices and would increase the price of goods regardless of if they were affected by a subsidy removal. “Even if they also enjoyed the subsidy, their excuse would be that everything else has gone up, and they too have to hike their prices,” he said.
Saravanan was responding to a statement by international trade and industry minister Datuk Seri Mohamed Azmin Ali, who said a targeted fuel subsidy scheme where the rich will pay more compared to lower income groups is being considered by the government. This will replace the current blanket subsidy scheme, which caps RON 95 petrol at RM2.05 per litre and Euro 5 B10 diesel at RM2.15 per litre for all consumers.
As reported previously, the government’s total fuel subsidy bill is expected to be RM28 billion for the whole of 2022, more than double the RM11 billion recorded in 2021. What’s still not certain is how the target subsidies will be implemented.
In addition to the rising cost of living and inflation (Bank Negara projects between 2.2% and 3.2% this year), Malaysians are also faced with declining purchasing power, an uncertain economy as well as currency fluctuations. “Putrajaya should be prepared to face the ire from the B40 and M40 groups if it plans to implement it now,” said Saravanan.
Even so, he believed a targeted subsidy could be a good thing as long as there was transparency and no room for abuse. “Many countries have implemented a targeted subsidy system, and it is about time Malaysia does the same, but the implementation requires transparency on the part of consumers and suppliers,” he explained, adding that there must be a system that properly identifies the income bracket of consumers who deserved assistance.
“Next, the system has to be carefully implemented so that only those from the low-income groups receive it. The other thing that will be a big issue is the paperwork and bureaucracy when it comes to claiming the subsidy. I hope the government will reduce the red tape and don’t give people the runaround. The simplest and easiest way to access the assistance should be implemented,” he added.
As for those in the middle-income group who lost out on the perks, Saravanan said supplementary measures should be carried out to increase purchasing power of these individuals. “The government should prioritise the needs of the people, for example, focusing on projects that reduce the cost of living, so that it will impact all who need government aid,” he added.
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Just sit-back and makan kuih-muih la
Let keep the solution as simple as possible. Too many kuih makes a problem become more complex.
A so simple solution is for MITI to mandate that all new luxury cars must be setup to only use RON97 & above, similar to Civic TypeR or Swift Sport. That way they will only use unsubsidised fuel and leave RON95 for the regular rakyats. My solution is simple, foolproof, and easy to implement which won’t affect those who might concerns on targeted subsidy petrol. The rich will pump unsubsidised RON97 into their luxury cars along with our Sinkies and the M40 & B40 can pump subsidised RON95. Those T20 that are willing to be humble and down to earth for using Proton/Perodua as their daily car can pump RON95 as they are humble enough not to flaunt their wealth around and they would not damaging their car engine where most of them are sensitive Direct Injection type. I think that should be allowed. This way it is fair to everyone.
MITI please take my free suggestion.
I love your idea. However, the implementation will not be so simple. Many luxury car owners will also have cheaper cars which they can misuse. If they are allocated max 100 liters per car of subsidized RON95,you can bet that they will use the subsidized fuel for their luxury cars also. You see, only a few high compression engines only run on RON97 while almost all other cars can run on RON95 without any issue. So technically, we can’t recalibrate the engines to use higher RON only. If there is knocking using a lower RON fuel, the knock sensor will detect it and the ECU will retard the spark accordingly.
Copy paste: “of course they own perodua and myvi.. but they are very much less likely drive those car, definitely they will use their continental or luxury cars”
they use Myvi/proton to pump Ron95. then at home, transfer the petrol back to their luxury car. Simple macam ni!!!!!!!!!!!! so, it’s not fool-proof.
Other than those Lambo, Ferraris, Porsche super/exotic sportcars, there are only few high compression small performance engines i.e. Suzuki Swift Sports, VW Twincharged needs RON97. Under “normal” driving conditions, Merc BMW Volvo Audi Malaysia already tuned to tolerate RON95. So yeah, mostly not hurting the “elite” in T20
Dumb idea. any car only setup for RON97 can and will also run on RON95 at reduced power.
So you are saying you are happy when rich people cant and dont show of so you allow them to use RON95. but when they decide to show off then cannot use? Is this some kind of jealous mindset? You are happy to see others driving car same level as you, but not when they drive better car then you. This is sickness.
In UK, the Opposition are demanding Gomen to tax the rich.
In MY, the Opposition are demanding Gomen to spare the rich.
2011 – min salary RM800
2022 – min salary RM1500
Tax free income, no minimum education requirement.
We need leaders who has vision for future.
To motivate T20 for country development,
It will overspill to B40, motivate the B40,
More training for B40 to be a good skilled workers, international level.
Got hand got Leg, Malaysia need Maju.
Only retired senior citizen/OKU/critical illness patient deserved subsidi.
Not those who get >RM1500 income,
Not those who aren’t working but self claim B40.
fanning B40 to jelly T20 jer
Forumers are asking:
Haha on May 24, 2022 at 8:30 pm
What m40 can afford MB?
Lets see how many come here to plotek T20 who might I remind all, collected a measly RM 40k from over hundred T20 members for charity.
Many B40/Fresh Graduate looking for good training,
To be ready for 5G future,
looking for respect from society, not charity,
Don’t want to get replace by future robot,
Subsidi won’t help.
Only lazy ppl want subsidi.
A good many my fellow T20 have no training some lacking higher education qualification, but we are rich and you are not. Just sayin
T20 shaking cos gov is taking their walking sticks after years of being used to it.
U not making >4.9K monthly?
Ppl don’t like parasite.
Not working, get subsidi.
Part time freelance also self claim B40.
Correct. Ppl are fedup with T20 parasite sucking subsidised petrol for decades.
Who pay the high income tax to subsidize you?
Who has offshore bank accounts to underdeclare income tax?
Look, he’s shaking already!
No system is foolproof, any will be hacked eventually and abused. US taxation system are global reaching but still billionaires can abuse it thru going offshore.
what is your goal first? Save government subsidy money or help the poor ppl? to help the poor, u already got a system in place with the bantuan money. to save government money, then just see how much you can afford to subsidize. if you can only afford RM1/ liter base on the volume…then subsize up to that cap and the remaining pass on to the fuel pump. this way, you won’t be seen as penalizing a group of ppl who are malaysian, paying most taxes, and done nothing wrong. and u don’t have to crack your head on a system that is destined to fail and waste more tax money. Simple or not si jokers jokers sekalian?
without subsidy, people learn how to manage their income wisely.
remove bulk subsidy and use targeted subsidy.
Without subsidy, people have no income to manage wisely.
Remove car tax first. So people need not to fork out loan payment for years & use the saving for paying market price fuel.
Lagi bertambah jam la jaan Ali ooooiiiiii
So u agree increase fuel price while car price remain high?
Yes
Kereta murah, petrol mahal. will less jam. people will drive less and only when necessary. They can have car but not used most of the time. Kereta mahal, petrol murah = lagi jam.
Lagi bertambah jam la jalan Ali ooooiiiiii
You save like RM 20k for removal of AP and taxes but spend like RM 30-40k for fuel surcharge paying full price. And that does not include higher cost of spares & consumables.
Genius idea! No wonder Malaysia is going down the dumps.
For sure u did not know why car spare part also high. Do u think if car have AP, spare part don’t? And btw, who said only save RM20k if AP n tax gone?
How does removing car tax will help in paying market fuel price?
You remove car tax, people will buy the same price albeit a better car. So where’s the savings?
If want to remove subsidy, no problem at all. Be fair to everyone!!! Why should T20 hard earned money paid as income tax has to use to subsidize those not working hard?
3 types of situations”
1) People buy cheap car with high fuel price
2) People buy expensive car with cheap fuel price (Malaysia)
3) People buy expensive car with high fuel (Singapore) but this people enjoy good public transportation system.
If Malaysia, in category 2, wish to remove subsidiary, what should government do?
England as example,
Fresh Chemical engineers earning GBP28,600. Merc C200 selling at GBP38,785.
Fresh chemical engineer here earning about RM30,000. Merc C200 RM280k+++++++
For British, their fresh graduates want to own Merc C200 just cheaper than Myvi!!!!
What government do to help us become high income country other than force employers to increase the base salary?
And don’t forget to pay 20% VAT like UK do.
Then what is your solution? Gomen turn into Komunis and force companies pay First World salaries?
All Malaysian especially T20/M40 deserve to enjoy the subsidy. Why ban high incomers (high tax payers) from enjoying the subsidy in 1st place? This is unfair when compare to some hidden ‘riches’ that do not file tax at all. We should fire incompetent ministers and public servants who goyang kaki in office. Look at our country annual finance report (RM322.5 billion), operating expenditure takes 73.3%!!!
Already year 2022 and still need to be spoonfed…
Just sell RON91/92 , with subsidy for motorcycle use. Public transport need to be enhanced. Poor public transport at bolehland = can sell more car
Gomen may get more money by reducing your makan2 bajet and kursus at fancy hotels.