Economy minister Mustapa Mohamed recently said in an interview with Bloomberg that the Malaysian government has begun work on replacing the current blanket fuel subsidy scheme with a more targeted approach. This is in light of rising government spending to deal with higher living costs faced by the rakyat.
“The target is to ensure that those who need subsidies, will get the subsidies. The sooner it is done, of course, it will relieve pressure on the government’s budget,” Mustapa said in the interview. A targeted subsidy will also apply to non-mobility essentials like cooking oil, the report stated.
Last Friday (June 3), the finance ministry said in a pre-budget statement that the government’s expenditure is expected to increase significantly by about RM30 billion due to unanticipated subsidies for fuel, cooking oil, chicken and eggs as well as a flood relief. More recently, on June 6, prime minister Ismail Sabri Yaakob said the total subsidy bill this year could exceed RM71 billion.
As for the how much the government is forking out to subsidise fuel, it was previously reported that the total bill is expected to hit RM28 billion for the whole of 2022, more than double the RM11 billion recorded in 2021. As per the latest fuel price update issued on Wednesday, RON 95 petrol and Euro 5 B10 remain capped at their ceiling prices of RM2.05 and RM2.15 per litre respectively, while RON 97 petrol hit a new record high of RM4.72 per litre.
Mustapa’s comments to Bloomberg reaffirms what he said back in April this year, although there’s still no indication when a targeted subsidy scheme will be implemented or how it will be done. We posed some possibilities in another post that touched upon international trade and industry minister Datuk Seri Mohamed Azmin Ali’s statement where he said, “those with a BMW cannot receive the same subsidies as those with Kancil.”
Given what we’ve heard from the government so far, a targeted fuel subsidy scheme is the (very near) future for Malaysia. Barring any backtracking, what do you think is the best method to implement such a scheme? Share your thoughts in the comments below.
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Will see another round of inflation after this..MYR feels like toilet paper
Simple jer….
(1)Individual with maximum 1-active car and 1-active motorcycle
(2a)Individual that owns any NEW car that classified BUDGET category (less than 60K) – Axia/ Bezza/ Myvi/ Saga/ Iriz/ Persona etc.
(2b)Individual that owns any motorcycle that classified BUDGET category (less than 15K)
(2c)Individual that owns any 2ND-hand car aged 4-12 years old that classified ECONOMY category – Ativa/ Almera/ City/ Vios etc.
(2d)Individual that owns any 2ND-hand motorcycle aged 4-12 years old that classified ECONOMY category – below 150cc
(3)JPJ system CHECKS insurance renewal
(4)Individual entitled get FUEL-PIN from JPJ
(5)Individual entitled get RON95 200L/mth subsidy
Hahahaha Dog-ter Wee would be happy to assist
B40 buy old bmw below rm40k , vs. T20 Toyota Vellfire above rm200k. —>Roger that rich T20 rm200k vellfire get the subsidy, poor B40 buy used rm40k bmw get zero subsidy.
T20 buy ativa-rm70k x70-rm100k, B40 buy used bmw rm40k. Again….—> T20 high income get subsidy, poor B40 no subsidy.
Sohai punya statement…
Aiyo!! B40 jangan-lah beli BMW lama… maintenance giler tau? kalo T20 sanggup miliki “one-and-only” kereta Ativa “second-hand” kita hormati amalan praktikal dan jimat cemat nya.
T20, M40, B40 semua ada bayar cukai. Wang mereka bukan percuma atau haram. Prinsip apa2 akta nanti bukan tujuan hukum sesiapa.
#LoveMalaysia
#SaveMalaysia
Such sweeping statement, you make as if all b40 will run out and buy old beemers or mercs. Lol. I’d love to see which b40 would buy an old beemer knowing that such cars are maintenance intensive, expensive and hard to get spareparts, plus these cars drink petrol. Those who do buy are mad enthusiasts whom have other daily driven cars.
Apa lagi civic mau, bila bili
kereta dah pun pre-bayar tax >81% minimum dah…
Excise Duty : 65% – 105%
CKD or CBU tax : 10% or 30%
Sales Tax : 6%
Bila mau cancel atas 2 jenis tax/duty, hanya tinggal Sales Tax SST/GST saje?
Sebenarnya T20+ tauke tauke milik punya syarikat company yg pakai paling banyak subsidy Diesel under company Bus and company Lorry.
Ini menteri ada problem, tauke besar millionair syarikat bus dan lorry pulak dibenarkan boleh kasi subsidy diesel.
System wise everything is doable. JPJ sure has all information pertaining to grant dan insurance. If JPJ system process the data and synchronise to MoF for subsidy approval. Everything is automated end-to-end. Just like BR1M don’t take time at all.
Petrol subsidy paling manyak pakai oleh tauke besar company car , bus , and lorry for comnercial purpose.
Kasi Subsidy paling untung ialah tauke syarikat company;
Bukan T20.
Pi collect data bikin statistic dulu.
memang simple in theory..cakap senang
but to implement and enforce, i also dont have any idea how the gov will do it
When there’s a will, there’s a way bro
Am I subsidized too. I only got 3bijik Toyota Vellfire, Lexus 460, Mercedes Benz, Audi, Honda Odessey, Toyota Land Cruiser dan Chrysler Jeep Wrangler. 2 motosikal Harley Davidson, BMW C600, Ducati, Kawasaki & Honda C100…
Apa lagi civic mau, bila bili
kereta dah pun pre-bayar tax >81% minimum dah…
Excise Duty : 65% – 105%
CKD or CBU tax : 10% or 30%
Sales Tax : 6%
Boleh cancel Excise Duty dan importntax kah?
Too complex. The best way is follow my suggestion, make all luxury cars programmed to only run RON97. And if DAP gets to rule again, that makes it even easier as only T20 luxury cars will be on the road. Then abolish RON95 and only left unsubsidised RON97 in DAPland. Super duper easy right.
Today,Tengku Z said we have enough $$$to cope with fuel subsidies this year.If not enough,then only minta Bank Petronas to chip in.
This grandpa dude said targeted fuel subsidy still ongoing.
Then the assmin dude very against BMW owners enjoying subsidy.
Who is giving the correct info? Or All these are just to scare the hell out of the poor rakyat?
Better dont listen to garbage.Dare to abolish fuel subsidy or reinvent GST..WE dare u…like the karate guy who dare the Chinese kungfu master in Yip Man 4. Bring it on.See whether they can cope better than KJ’s dad in law when tsunamis of backlash arrive.
Advertising your stupidity on the World Wide Web is not cool.
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No need. Bosses will just increase price. Like they cut allowance when epf raised. They do business, so what they increase will offset everything you gain. The poorer ine will surely feel the pain and next time they will choose wisely.
Targeted subsidy might be moot when DAP takes over and decrees that cars will be expensip for all except their members, T20, & cronies. The B40 & M40 would have no use for subsidised petrol when they have nothing to use with, perhaps bring back home to light kerosene lamps since electricity might be expensip for them later on. Kesian…
Barring any backtracking, what do you think is the best method to implement such a scheme?
tax the rich, so no problemo.
Follow my idea above. Made easier with DAP supreme idea if the rule.
“The target is to ensure that those who need subsidies, will get the subsidies. The sooner it is done, of course, it will relieve pressure on the government’s budget,” Mustapa said in the interview. A targeted subsidy will also apply to non-mobility essentials like cooking oil, the report stated.
Another awaken ministry Malaysia, Maju Malaysia,
Admit mistake, rapid adapt and implement good change.
No more giving free fish to ppl who got leg, hand, brain,
Plenty Job > RM 1500, min mandatory salary.
Targeted subsidy, not bully RM5.5k gross salary/parent T20 by the richy T01 too.
But the impact is definitely there,
Gomen must show oppurtunity where to fish, how to fish…
Not spoon feeding..
Yes, who need to subsidize should always to be subsidized. Like those bumi that have money to buy bunglo should not entitle 7% discount. The initial intention wanted to help those not afford which majority was bumi but now become a privillege status. I am not racist. Those who need help should be helped. We have to use money wisely. Country is using more than halves for administrative expenses to support redundant public servants but we do not need that much. Yet not efficient.
The best way is to remove subsidies but raise minimum wage to rm10k per month…
You want to live like Zimbabwe? If 10k/month but sebiji telur cost you RM10, then how? Don’t tokok here lah.
Good job.
They have all the data… Subsidy should be given to Malaysian only, give subsidy via mykad…. Sort or monthly subsidy according to data from lhdn…. Use more than quota should pay normal price without subsidy…
Disagree, we have paid a hefty price for the car and that makes us 2nd most expensive in the world to own a car. This tells the subsidy does not come cheaply and yet you wanna remove from us?
What do you mean?
Axia and Saga starts $8000 for 4AT only.
As cheap as India cars already, but better.
I think instead of targeting based on people’s income, it can be done based on locale, logistics, and environmental. Assuming people can accept the goal is to fix environmental issue and not just give people money to have easier life, and understand that no solution is perfect, sure someone will find a loop hole.
Example: no subsidy in major city, partial subsidy in suburbs, and full subsidy in rural areas. Why? Kampung area people really need to drive far, and probably not much choice. People not too much perhaps not heavy burden; suburb probably lacks public transport so just partial subsidy, and it may make those who feel the heat just car pool into the city; no subsidy in the city, because all your subsidy just wasted people burning them in traffic jam. This is also to force everyone needing public transport, and with more demand, I’m sure company will try to build more infra.
Sure got people scold such suggestion, but again, depends on your goal. I personally think its the best chance to try to shape the society to something more modern, and not just *feed* the people.
T20s shaking cos gov is taking their walking sticks after years of being used to it.
Sorry, they dont mind and does not pay attention. They are going to Pavilion in their BMW having high tea in TWG thinking which macaron to eat. Sorry only you guys thinking busily on behalf of them, because you are not t20.
And yet they got people here to defend them lol
Go to your pavi in your bmw, but why change to ron 95 though? thought t20 so rich use RM4/litre ron 97?
Want to follow market price.. but only when price is up. It’s just 22b for god’s sake compared to 50-60b for 1mdb or ecrl. What did Malaysians get out of 1mdb and ecrl?
we got our money stolen by jibby.
I hope this study is completed after everyone switch to electric.
Cutting subsidies is one aspect, but the government really should get people to move to EVs. Maybe cut tariffs on EVs, facilitate entry to give people options in the market. Also more public transport investment to give the rakyat more options than taking debts up to their necks to buy a vehicle.
Gov can’t target subsidise like B40 or M40 only. It becomes too complex and too much faults. Example, B40 can be millionaires due to any reasons, he/she will not report to gov. And T20 can go bankrupt due to business failure and lost all his wealth, he/she now B40 or M40, they entitled for subsidies but they don’t because in record showing T20.
Gov subsidies should be to all citizens with limit amount to each citizens (e.g RM300 to individual each month for car and RM50 for motorcycle) T20, M40, B40 can’t exceed that amount capped.
To do so, the gov can create an app, eligible citizens (valid driving license) to register with IC authenticated. They need to register his vehicle (that person owns a vehicle) in the app for entitlement. (Prevent individual without vehicle to receive subsidie). The app will show the subsidise balance. If fully used up, wait for new subsidise next month. To T20, easily finish it.
1) At petrol station, insert credit card and then Mykad to check his subsidise (If available balance flap yes, if no balance, flap no)
2) Cash user, go to counter to scan app.
3) if yes, get discount price of 30% price reduction (e.g. normal price RM 3 per litre, you got RM2.10 per litre) and pump with subsidise price.
4) if no, pump with normal price.
5) Once completed, system will update the subsidise used for the citizen to update the balance. If available balance below 0 or negative balance. Wait for next month subsidise.
You can use the app to subsidise commercial vehicle as well (lorry, bus, heavy vehicle, fishing boat) like a section to register Corporate vehicle and amount to subsidise those vehicle.
That the idea. Not sure is working system or not.
expensive cars expensive fuel crap roads. syabas.
Targeted taxation already exists via differential road tax for larger engine sizes. Why not simply adjust that to suit the government’s latest subsidy requirements?
I paid abt rm28k for incone tax. Tell me a reason why I should not be subsidized while others are subsidized? Just becuse want to punish me because I studied hard to get my master, working hard to be senior mgr now?
B40 is continued enjoying subsiary because reward then for studied lazy, failed SPM and continue lazy to be factory operator?
What did government do to help T20? T20 income dropped from sky?
Get off your high horse bro. The farmer who planted the food you eat is also usually from B40 too you know.
1 malaysia car owner Below entitle for 1 car with max 1800cc, get subsidy up to first 100 litre of fuel per month, exceed = market price. Cut off every 1st day of new month. Without IC verification all petrol station sell at market price. If want to enjoy subsidy then use designated petrol card/ go counter validate.
1 malaysia car owner Below entitle for 1 car with max 1800cc, get subsidy up to first 100 litre of fuel per month, exceed = market price. Cut off every 1st day of new month. Without IC verification all petrol station sell at market price. If want to enjoy subsidy then use designated petrol card/ go counter validate.
Bring back the cheaper Regular petrol RON 87, used in the 80’s. Old vehicles used to run on Regular petrol.
You all talk too much cock. Subsidy on this issue shall and be not an issue or topic to talk or even go through our brains. C’mon. If your company running at loss, you cut your staff salary ka? Its the boss problem isnt it? They screw up a system which suppose to be transparent, not to say superb but 50% is enough though. When the government earning profit, where it goes? Does that make a news? Dont tell me those people sitting on top is so silly to always running at loss? Those are commodities alike market, ppl buy with no choice its not nasi lemak which u can skip and take bread. Running a business today with everything from step one into end product at an inflating price. Yes you can hike the price since its inflation right? You need to subsidise SME not mnc. Eventually ppl wont go loosing jobs and salary. Help the local industry, tender gov project with publicised pricing. Check on those departments which earns the most in the coutnry get the fund from there. Why everytime should we bare these selfish ppl action when the screw up? Plus, should 5k per month do the minister job? Why do they need 6 7 digits? Who says so? Its public servants cmon…. X70 cannot be their official car? Why vellfire? Why driver? Shouldnt the places they go has valet or special parking zone if they are so priviledge?
Be fair to those ppl stayin in kampung, cmon. They need to excel in life as well. Budget must be given for better lifestyle to them.
Nonsense. Whatever targeted subsidies they come up with will be subjected to abuse & misuse.
You either subsidise or you don’t!
Implement targeted subsidy based on driving license/IC with RFID chip would be best (need new chip card) or an app that is tied to the user account. Amount of subsidy can be granted based on litres per month (ie. 200L), or even differentiated tier based on income levels etc – data can be shared by LHDN.
Alternate method – a fuel card that allows subsidised fuel purchase (up to a maximum limit per month) – can be tiered based on income.