KUALA LUMPUR: The proposed levy system in implementing the targeted subsidy mechanism for RON95 petrol could cause some of the poorest households to be left out of receiving aid, says Economy Minister Rafizi Ramli (pic).
He said this was because about 40% of low-income households did not have their vehicles registered with the Road Transport Department (JPJ) under their respective names.
“Some families register their vehicles under other people’s names. We saw that happening when we implemented the targeted subsidy mechanism for diesel.
“Data showed a huge mismatch due to certain practices, either through ‘sambung bayar’ (taking over hire purchase payments) or cars purchased under the names of others,” he said during Minister's Question Time in Parliament on Tuesday (Nov 12).
Suhaizan Kaiat (PH-Pulai) had asked about the government’s views on implementing the petrol levy mechanism in the RON95 targeted subsidy mechanism.
Previously, there were proposals for the government to impose a petrol levy on vehicles when drivers renew their road tax.
Rafizi said the levy system was one of the three proposals being considered and so far, Putrajaya is of the opinion that the two-tier pricing system is the best method.
The third proposal was direct cash payment to qualified individuals, he said, but there were concerns that this could lead to price increases and inflation.
“Economists have said that direct cash payment is better because it does not involve petrol station operators.
“But the government sees a potential increase in the prices of goods because when fuel prices go up, traders will use it as an excuse to raise prices,” said Rafizi.
He added that there is no perfect method for implementing the fuel subsidy system and the government will choose the best one that will not cause a drastic increase in the prices of goods.
“Most importantly, the government will emphasise efforts to control the prices of goods and inflation,” he said.
When tabling Budget 2025 last month, Putrajaya announced that targeted RON95 subsidies will be implemented from the middle of next year.
On June 10, diesel subsidies were removed in Peninsular Malaysia, leading to an increase from RM2.15 to RM3.35 per litre.
