Govt fuel subsidy bill expected to be RM28b for 2022, blanket subsidy to end in favour of targeted subsidies


A goal fuel mechanism will be carried out quickly, as the federal government can not proceed to pay for a blanket subsidy due to a pointy soar in fuel pricing.

The authorities’s whole fuel subsidy bill is at the moment expected to be RM28 billion for the entire of 2022, a pointy rise from the RM11 billion in 2021.

This was revealed by MITI Senior Minister Azmin Ali throughout a press convention in the US at present, the place he’s at the moment on a Trade and Investment Promotion Mission.

We have been listening to this messaging for fairly a while now. Finance minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz stated Malaysia’s T20 group burn up greater than half of the fuel subsidy bill. So that’s 20% of the folks utilizing greater than 50% of the subsidies. So I suppose the thought is to cease this 20% from utilizing the subsidies, saving the federal government 50% of its subsidy bill yearly?

The query is how will the goal subsidies be carried out? The authorities has proposed numerous methods in the previous. In 2008, the federal government determined to concern a one off fuel subsidy of RM625. It was paid once you renew your street tax. The fuel subsidy was per car, up to a most of 5, and for automobiles it had to have an engine cc of 2,000 and under.

In 2014, there was one other plan the place these incomes under RM5k monthly would obtain full subsidy, whereas these incomes between RM5k and RM10k would solely get partial subsidy. No subsidised fuel for these incomes 5 figures a month. This plan by no means went by.

But that was the previous. Thanks to the pandemic, the federal government of the day is now used to crunching the information it has and paying out subsidies based mostly on what it is aware of about how a lot every rakyat earns.

The easiest way to pay out fuel subsidies would be to promote it at market value on the pumps and pay out subsidies the identical manner money help comparable to Bantuan Keluarga Malaysia, Bantuan Prihatin Rakyat and Bantuan Khas COVID-19 have been paid out in the previous. If you assume you qualify however someway have been excluded in the automated eligibility course of, there are methods to enchantment.

How do you assume the targeted fuel subsidy scheme ought to be carried out?

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