How much do you spend on petrol a month? According to deputy prime minister Datuk Seri Ahmad Zahid Hamidi, the B40 group spends an average of RM243 monthly on RON 95 while the T20 group spends RM399 per month, referring to the bottom 40% earners and the top 20%.
The DPM was quoting a study on the impact of the petrol subsidy programme, and his speech was read by domestic trade and cost of living ministry (KPDN) acting minister Datuk Armizan Mohd Ali at the launch of the Symposium on Cost of Living event yesterday, reported by NST.
The Bagan Datuk MP said that although fuel subsidy has helped to stabilise prices, ensure continuous supply and ease the cost of living for the people, the bulk of it has been enjoyed by the high-income group and non-citizens. Therefore, it’s unjustifiable for the government to continue with the existing approach, which is blanket subsidy.
“These findings indicate that the bulk subsidy approach does not effectively reach its intended target groups,” he said, adding that diesel subsidy is also being misused.
“It has been misused by certain parties who take advantage of the subsidised diesel, leading to irregularities and smuggling in the black market. Therefore, it is not appropriate for the government to continue with the existing approach that is unfair to the target group that genuinely needs assistance,” he said, adding that last year’s total subsidy bill amounted to RM91.9 billion.
“For this year, the original allocation for subsidies is RM64 billion, but the government projects this value to reach RM80.9 billion based on current spending. This ongoing scenario is not fiscally optimal hence it is reasonable for the responsible government to take action to improve targeted assistance delivery methods for the people,” he continued.
Heard this before? Ministers past and present have spoken about targeted subsidies for some time now, and this latest mention reminds me of the “those with a BMW cannot receive the same subsidies as those with Kancil,” statement by former MITI minister Datuk Seri Mohamed Azmin Ali in 2022. “For every RM1 of fuel subsidy, 53 cents go to the T20, while 15 cents benefit the B40,” current MITI minister Tengku Datuk Seri Zafrul Abdul Aziz said when he was heading MoF in 2022.
But this isn’t just talk – the removal of blanket subsidy is happening in the second half of 2024, economy minister Rafizi Ramli said this week. This comes as a bit of a surprise as there was no mention of targeted subsidies happening next year in the recent Budget 2024 – only diesel was mentioned by PM cum finance minister Datuk Seri Anwar Ibrahim. Looks like the Pangkalan Data Utama (PADU) socio-economic database is almost ready then – we’ll see how accurate it is. Are you ready to pay market price for RON 95?
Looking to sell your car? Sell it with Carro.
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AI-generated Summary ✨
The comments largely criticize the government's targeted fuel subsidy scheme, highlighting issues of misclassification, potential loopholes, and the unfair distribution of benefits. Many express skepticism about the accuracy of the figures cited, arguing that they are arbitrary or manipulated, and warn that such policies may encourage fraud or benefit the wealthy disproportionately. Several comments suggest that all citizens should receive equal subsidies or benefits based on usage, not income brackets, and propose simpler, fairer systems like cash transfers or fixed quotas. There is concern about the complexity of implementing targeted schemes and their potential to exacerbate inequality, with some criticizing the government’s transparency and planning. Overall, sentiments lean toward frustration and distrust towards current subsidy policies, emphasizing the need for fairness, transparency, and effective reform.