New targeted fuel subsidy mechanism in testing, MoF to present platform to cabinet once ready

Jerrica · Jul 11, 2022 11:25 AM

New targeted fuel subsidy mechanism in testing, MoF to present platform to cabinet once ready 01

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz has confirmed that the government is in the midst of selecting a new targeted fuel subsidy mechanism. He told The Edge his ministry will present it to the Cabinet once it is ready.

He also revealed Putrajaya is testing several proposals to determine the best measures for the execution. He stresses that the execution of the mechanism is an important part of any platform the government decides on.

New targeted fuel subsidy mechanism in testing, MoF to present platform to cabinet once ready 02

As of June 2022, the government has spent up to RM 77.3 billion on subsidies, the highest subsidy in Malaysia's history. Out of that number, petrol subsidy alone cost the government RM 5 billion a month since last month.

Based on research done by the central bank and various other independent research houses, for every RM 1, about 53 sen of the subsidy is benefited by the top 20 percent (T20) of households.

Also read: Brace yourself for fuel subsidy cut; RM 4 billion worth of petrol subsidies paid as of March

New targeted fuel subsidy mechanism in testing, MoF to present platform to cabinet once ready 01

“If you assume the subsidy to be RM 30 billion, which it will be, then RM 15 billion of it is going to those who can afford it, which is the T20,” said Tengku Zafrul. Based on this, he stresses the need to limit the subsidy to the M40 and B40 households.

As of yet, Tengku Zafrul is not committing to a timeline as the proposal has to be presented to the Cabinet. 

Also read: At RM 37.3 bil, Malaysia spends more on fuel subsidies than healthcare

Jerrica

Writer

There isn’t a time in memory that doesn’t involve staring at cars. After discovering the excitement of watching Schumacher vs Hakkinen, Formula 1 became a major part of life. The love for cars and F1 ultimately led to a job with CAR Magazine. The untimely death of the magazine meant a hiatus from cars at lifestyle women’s magazine Marie Claire before another opportunity came knocking again.

Comments

Hassle-free purchasing, get your next car fast!

2022 Honda HR-V 1.5 S

Upgrade

Add your car

Not trading-in?   Sell your car

Latest Cars