Malaysia: Debate Continues on New Cap for Subsided Fuel

Domestic Trade, Co-operatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob states “Without a cap on the amount for each car, those eligible for the subsidised petrol would “definitely abuse it.  They will buy as much petrol as possible and transfer it into a drum or somewhere, and then sell it to those who are not eligible.”

Ismail Sabri said the Government was still discussing how much the limit should be and said this would be revealed to the public when it was fixed.  He admitted that those travelling long distances frequently and had no transport allowance might lose out due to the monthly cap.  However, there were others who would stand to gain, such as those driving small cars, living in small towns and working close to where they live.

The Government recently announced that it would fix a two-tier pricing system for petrol, depending on engine capacity, while non residents would have to pay the market price.  Currently, the Government is subsidising petrol at 30 sen per litre for all. The market price for RON 95 is RM2.10 per litre but because of the subsidy, the pump price is only RM1.80.

Ismail Sabri said a person would be eligible for subsidised petrol for only one car.  He said, however, that if the cars were registered to different people, like the owner’s wife or children, then each would be eligible for the subsidised petrol.

On whether there would be two different pumps (subsidised and not subsidised) at petrol stations, he said that would not be the case; instead the pumps would have two prices or just the market price but those entitled to the subsidised price would pay less.

The Government was also looking at inserting a chip into the MyKad with information of the car, so that those eligible could swipe their MyKad for subsidised petrol. The new pricing mechanism would apply only to the peninsula in the initial phase but it has raised more questions than answers.

PetrolWorld 170110