By Chong Zhemin, DAP Perak Economic Development Bureau Chief
Deputy Finance Minister Ahmad Maslan said yesterday that the targeted fuel subsidy mechanism which provides a subsidy to households earning below RM4,000 will be implemented in June 2015.
He commented further that the middle class will be given a partial subsidy and the high income group will pay for RON95 petrol according to market price.
On paper, the multi-tiered subsidy mechanism appears to plug the subsidy leakages and channel subsidies to the targeted lower income group. However the implementation of the targeted fuel subsidy mechanism is complicated, bureaucratic and troublesome.
Even with the use of a secure verification system such as MyKad or petrol subsidy card, the proposed system is still open to abuse. How will the government prevent the card to be loaned to others to purchase subsidised fuel?
With the impending GST implementation, the proposed fuel subsidy system will be a double whammy and add to the burdens of those already living in hardship.
I urge Putrajaya not to rush through the targeted fuel subsidy system hastily. Public feedback must be gathered and a more comprehensive study needs to be done on the proposed system.
Ahmad Maslan said that the high income group will pay the RON95 according to market price. We should take Ahmad Maslan’s word with a pinch of salt. This is as the government had previously promised to float the RON97 according to market price but failed to honor their promise. With the drop of global oil price, the price Malaysians paid for RON97 currently is higher than the market price.
Ahmad Maslan also mentioned that the RON95 price will be maintained until June next year. Unless the government announces the implementation of fuel tax which would be “daylight roberry” for Malaysians who are now paying a higher than market price for RON95. This is because Putrajaya had previously promised a 28 cent per liter subsidy for RON95.
If Putrajaya’s words could not be trusted when implementing the current blanket fuel subsidy system, how can Malaysians trust Putrajaya to implement the targeted fuel subsidy mechanism as promised?
