Govt urged to be transparent when implementing fuel subsidies

PETALING JAYA: The government’s mechanism for rolling out the targeted subsidies programme for petrol and diesel must be credible and relayed properly to the public, says Socio-Economic Research Centre (SERC) executive director Lee Heng Guie.

“It should be comprehensive, credible and communicated well,” he said.

He said Malaysians also had the right to know how the government was spending the funds saved from the retargeting of subsidies.

Economy Minister Rafizi Ramli told the Dewan Rakyat yesterday that there would be three methods for determining the targeted subsidies for petrol and diesel: a person’s net disposable income, net disposable household income through a social protection or social assistance scheme, and a combination of household and individual earnings through a subsidy card.

However, Lee said the mechanism must take into consideration various factors.

For instance, he said a household might have someone working in Kuala Lumpur while another family member works in Seremban. As such, he said the “petrol quota” would not be the same.

“So the payment needs to be fair,” he said when contacted.

However, Lee agreed that targeted subsidies are “a must and the right way to go”.

“Right now, we have the Top 20 benefiting from the broad subsidy system,” he said.

(Prime Minister Datuk Seri Anwar Ibrahim said the total annual subsidy cost had reached RM81bil and that foreign nationals and the rich had benefited from it as well.)

Lee suggested that the government introduce a token system meant for petrol usage only.

“If the government adopts the cash system, it may not be used for petrol.

“The person may spend it on something else,” he added.

Once the targeted subsidies begin, Lee said there would be the question of whether the retail price for diesel and petrol would be adjusted or floated.

Federation of Malaysian Consumers Associations (Fomca) chief executive officer Dr Saravanan Thambirajah said the Central Database Hub (Padu) system would play a vital role in identifying the assistance needed to implement targeted subsidies.

“All the data can be analysed to ensure we have a good system in place to implement the targeted subsidy,” he said.

It has been reported that Padu, which integrates socio-economic information from every household, will begin operations in January next year.