RON95 petrol subsidy: low-income households could miss out due to car ownership issues – Rafizi Ramli

The proposed levy system for the implementation of targeted fuel subsidy mechanism for RON 95 petrol could leave out some of the poorest households from receiving aid, reported The Star. This was due to around 40% of households not having their vehicles registered with the road transport department (JPJ) under their own names, said economy minister Rafizi Ramli.

“Some families register their vehicles under other people’s names. We saw that happening when we implemented the targeted subsidy mechanism for diesel. Data showed a huge mismatch due to certain practices, either through sambung bayar (taking over hire purchase payments) or cars purchased under the names of others,” Rafizi said in parliament.

While there were proposals for the government to impose a petrol levy on vehicles when drivers renew their road tax, the levy system is one of three proposals being considered, and so far Putrajaya is of the opinion that the two-tier pricing system is the best method, said Rafizi.

RON95 petrol subsidy: low-income households could miss out due to car ownership issues – Rafizi Ramli

The third proposal was the method of direct cash payment to qualified individuals, however there were concerns that this could lead to price hikes for goods, and inflation, the minister added.

“Economists have said that direct cash payment is better because it does not involve petrol station operators. But the government sees a potential increase in the prices of goods because when fuel prices go up, traders will use it as an excuse to raise prices,” Rafizi said.

Rafizi said that there is no perfect method for implementing the fuel subsidy system and the government will choose the best one that will not cause a drastic increase in the prices of goods. “Most importantly, the government will emphasise efforts to control the prices of goods and inflation,” he said.

At the tabling of Budget 2025, prime minister Datuk Seri Anwar Ibrahim revealed that the government will restructure the RON 95 petrol subsidy in mid-2025 with a switch to a targeted subsidy.

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