With the new price of subsidised RON 95 petrol of RM1.99 per litre to take effect on September 30 for holders of the MyKad and valid driving licences, former minister of economy Datuk Seri Rafizi Ramli has weighed in on the development.
Based on the present exchange rate of RM4.20 to one United States dollar and the price of crude oil at US$67 per barrel, Rafizi estimated the fuel subsidy to be 60 sen per litre of RON 95 at its price of RM1.99 per litre.
The former minister of economy stated that the effectiveness of the government’s chosen method of two-tier pricing as opposed to cash aid is subject to a number of factors. Rafizi is of the view that providing subsidised petrol to all Malaysians will not significantly reduce overall fuel consumption, and the government will need to spend more to reduce the retail price of RON 95 petrol to the announced rate of RM1.99 per litre.
With these considered, rough calculations indicate that the Malaysian government’s subsidy expenditure will remain at around RM10 billion to RM15 billion a year for 2025 and 2026, and therefore the targeted subsidy’s effect on the strengthening of the nation’s fiscal position is not as great as previously projected by market analysts, Rafizi said.
Rafizi stated that the new RM1.99 per litre price for RON 95 petrol will not fairly distribute aid, as the more affluent groups will likely have more vehicles per household, and each adult in these households will have their own vehicles and driving licences, and so these more affluent households will effectively benefit from a larger subsidy amount compared to less affluent groups.
From this perspective, the approach taken is not for retargeting subsidies, but is instead limiting subsidies, Rafizi said. The reduction in price for RON 95 petrol can be expected to benefit motorists based in rural areas, as it should bring savings in fuel costs assuming usage patterns are unchanged. The added financial burden is potentially on urban motorists who use more petrol in commuting, said the former minister of economy.
Rafizi cites the example of an M40-demographic married couple who drive to work in their own vehicles, and should their monthly fuel consumption exceed 300 litres, which is the quota for the upcoming RM1.99 per litre price of RON95, this will result in increased monthly expenses. The more affluent among urban dwellers will also be subject to this increased cost, but the impact upon finances is not the same as that for the M40 middle-class, he said.
While the implementation of targeted subsidies is aimed at reducing leaks, this may also introduce new leakages as those who do not fully utilise their 300-litre monthly quota could purchase the fuel and resell their quota, Rafizi stated.
Those eligible for subsidised RON 95 petrol with no limit, such as e-hailing drivers could present the risk of the subsidised fuel purchased in bulk for reselling on the black market, he said. (This was addressed today by second finance minister Datuk Seri Amir Hamzah Azizan, who said that steps will be taken to verify that those who need more than 300 litres a month, such as e-hailing drivers, are genuinely eligible.)
Rafizi acknowledges that the decision on how the targeted subsidy is implemented has been made, and says he is certain that the matters he has mentioned are known to the ministry of finance which has chosen this method. Its overall effect on the nation’s fiscal position, subsidy targeting objectives and the risk of leakages will only be known in the six to 12 months from now, he said.
Looking to sell your car? Sell it with Carro.
During your draft stage you didn’t realize that? Formula sotong…
Did u factor-in the ceiling of 300L subsidised RON95 for all and everybody getting the same amount of subsidy except e-hailing worker?
Should ask Rafizi & PMX, what about their janji above.
Dah menang lepas tu capati janji!
janji masa tahun 2018, lepas tujuh years inflation RM1.5 dh naik sampai RM1.99 lettew
Many years ago U Rafizi, used excel sheet and plot your formula, and claimed the right price for petrol should be RM1.90 and if U, the Keadilan Party won, we will get such price. Now that we are getting close to RM1.90, so why U membising now???? Use tax payer money to subsidize whatever, taxpayers also nvr bising.
Problem is that here until today what is the category for T20/T5 or whatever please do tell.
Anyway what is the logic that the rich will use more RON95 petrol? Are their newer car more efficient than current or are they gonna fill up RON95 for their Ferrari or they can split their body to drive multiple car a day or do they have more children?
Rafizi’s argument is flawed. Even though a person is rich and may have more than 1 car, he/she is still limited by the 300L quota which is only a savings of RM18 per month. So the system is fair to all B40, M40 and T20 groups. I also don’t see any issue for those who did not fully utilize their 300L monthly quota. I can’t see many people going through the hassle to resell their quota for just less than RM18 per month. The only potential leakage is from those misusing the e-hailing unlimited quota.
It is RM180.
But agree, too much hassle to resale.
what too much hassle. petrol, diesel, cooking gas, cooking oil smuggling has been happening since ages ago in areas bordering Thailand/Sulu/Nusantara. u guys must be sleeping in gua batu to not be aware of this.
300l x. 0.60cent = 180?
if your margin 0.60cent, better our neighbor buy direct without budi95
Goverment should work with e-hailing companies to get an accurate milleage usage per rider as the data is there from GPS tracking. Just add some buffer for each rider like 20%, it should be adequate. This is one way to plug the possible leakage issue.
YES 300L is alot
99% anjeng Longkang k/tard dont have RM600 per month to spend on RON95
This guy wronged every single thing when he’s not in the gov. The irony is nothing was right when he was in the gov.
300 litres gets you about 3,000km range in a not so economical car. If 3,000k per month is insufficient, please relook into how you are living your life.
kerajaan pun suka scam. 1.(99sen), apsal tak letak 2.00, 1 sen je nk 2. Nak bagi nmpk seringgit jgk. Saya ulam
didnt expect to see M type lagi Kiasu than C. letak harga 2.00 korang komplen mahal. letak harga 1.99 korang komplen kerajaan scam.
Better remove all fuel subsidies and abolish all toll highways!@!!!!
T20/T5 most of em use EV/PHEV/Hybrid nowadays. What kind of Not Fair are you talking about.
actually many T15 use sports car like AMG45 or BMW M4 which must use minimum ron97. cannot use ron95 because engine pinging premature detonation. kesian T15 no subsidy
what the hell talking ? the 300 liter quota is per IC not per car also….
sebab tu ada cap 300L, ada kete 10 biji kt rumah pon tetap 300L
It is easier pointing at the imperfect when stepping down. To me, if there is any better constructive suggestion, please propose. If not, please shut up.
What has he done when he is in the position? I can’t remember any.
Why you calculate (2.05-1.99)*300= RM18. The floating price is actually around 2.60/liter.
the actual market price can be RM3-3.5 depending on ringgit strength and whether usa starts a war in middle east. go look at thailand indoensia prices if u dont believe me.
The barista should say ‘bodoh’ to him…
Looks like almost everybody is getting this petrol subsidy including the super rich. I think those who are rich enough to drive big cars should not get subsidy. So in order to be entitle for this subsidy, every person must show proof of car ownership. Look like anybody who has a valid driving licence is also entitle. I know of many who has driving licence but does not own a car. Who is to prevent them from buying petrol for their friends etc.
Kita tunggu lebai midin jadi PM lagi
Super annoying and unnecessary criticism.
Made necessary to cover up a ridiculous proposals of tiered pricing by income in the first place. As if people are static in one socioeconomic status for life..
Suddenly Rafizi trying to get support when he was previously in govt n did nothing. Useless moron
If it was rm9 per liter for everyone, Mesia would become a superpower in 2 years
From day one have said don’t kacau ron95…it will cause inflation and disrupt economic stability… those Ministers should have better things to do… don’t be like Maszlee… the only great things he has done were white shoes change black shoes & introduce jawi for Chinese kids… and that’s the quality of our Ministers… would you believe??
Let’s not forget where the money to subsidize comes from. The taxed rich. The m30 and t20 that pay those heavy taxes that you can’t run from in your PCB. This provided the money to provide subsidy. So what’s fair?
Tak risau ke negara bankrup..
Apa bodo la this Rafizi. ‘Affluent will utilise subsidy bla bla bla’ hello look at the super rich, their cars are almost always super Low Mileage. The upper class wives go makan at Bangsar use Grab. The Mercedes S400h only comes out for pengilan and the occasional drive to a supercondo in Penang. The working T20, T10 already has petrol claimable to the company, with driver provided, and many are driving the latest continental PHEV or mild hybrid, their overall fuel consumption of their fleet is better than a Myvi.
It’s the normal B40, M40 la who suffer and plod along ELITE and NKVE daily racking up mileage with our sub-par 12-14km/l national cars, clogging up the highways every festive and long weekend season. Unable to afford to live in the city centre but have to work at the golden triangle for a decent salary.
Apa rubbish more cars more subsidy itu ini bla bla, the attitude towards this government is be damned if you do be damned if you don’t.