KUALA LUMPUR – Consumer associations have backed the government’s proposed targeted RON95 petrol subsidy programme, which is due to be implemented in the second half of 2024.
They anticipate the distribution of subsidies in the form of cash or vouchers to benefit deserving consumers.
Federation of Malaysian Consumers Association president Datuk Marimuthu Nadason said the organisation advocates for a targeted subsidy facilitated through the Central Database Hub system.
“(This is) so that eligible people can receive the subsidy. The subsidy can be in cash or a voucher, but the voucher must be easy for the eligible to use,” he said.
Nadason also said that the subsidy should not be restricted to specific locations, as consumers have the right to choose.
He said the organisation supports the targeted RON95 subsidy programme, citing the current prevalence of leakages.
“Everyone is enjoying our subsidy, even with the cooking oil packets, and (RON) 95 packets are smuggled to foreign countries,” he said.
“For a better social safety net, targeted subsidies are much better for our country.”
However, he said that any increase in prices of petrol, energy, or foreign exchange will directly impact the price of goods and services as the market is driven by the supply and demand mechanism.
“This is beyond the government’s control, but of course, the government can (execute) enforcement through the Price Control Anti-Profiteering Act 2011.
“If there is any increase in the price of goods and services, the government can investigate through that act because we need justification for the price increase,” he said.
Meanwhile, the Consumers’ Association of Penang (CAP) hopes to “see the implementation of targeted subsidies that will benefit those who are worthy of assistance.”
CAP president Mohideen Abdul Kader said that there are currently less than half, or 47%, of Malaysians who are in the M40 and B40 income groups that benefit from the current blanket fuel subsidies.
“The targeted subsidies are the right approach and should come in the form of cash for fuel and other essential items.
“With the savings from the removal of subsidies for the T20, it (government funds) can be used to fund public transportation, public healthcare, education, and social welfare,” he said.
He said that the price increase of goods does not hinge solely on government subsidies, as there are many factors affecting costs, such as problems with the supply chain and the strength of a country’s currency.
Other factors he mentioned included geopolitical and weather conditions, such as the effects of global warming.
On November 28, Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi said the Impact Study Report on Petrol and Diesel Subsidy Programme for Selected Transport Sectors showed that the T20 group used RM399 worth of RON95 petrol a month on average, while the B40 income group used an average of RM243 per month.
On November 27, Economy Minister Rafizi Ramli said that the targeted RON95 subsidy programme will roll-out in the second half of next year to optimise its resources towards those that need it the most.
He added that a country where those in the T20 income group are receiving 53% of blanket fuel subsidies is not a “sustainable” or “fair” model.
On October 16, Prime Minister Datuk Seri Anwar Ibrahim said that targeted subsidies are the way forward, as the government wants only deserving groups to benefit and avoid leakages.
He mentioned that current subsidies for fuel, chicken, and electricity are also enjoyed by those who possess extreme wealth, some 3.5 million foreigners in the country, while some were lost to smuggling schemes.
“The government has been providing RM81 billion in subsidies, the highest in the world. I am often criticised for saying that ‘the day we come to power, the following day fuel prices will drop’.
“It is a different context because at that time, the oil price in Saudi Arabia was 50 sen, and now it’s RM2.85 there, while here it’s RM2.05 (a litre of RON95),” he said during the monthly assembly with staffers of the Prime Minister’s Department. – December 2, 2023