While the government says it is continuing to study the expansion of its fuel subsidy rationalisation programme to incorporate RON 95 petrol, stating it has yet to make any decision on the subject, it is inevitable that this will happen, although likely not in the immediate future.

Of course, talk about how much financial assistance will be offered as well as how it will be provided has begun. So what would a decent minimum sum be for monthly cash aid? Well, according to Malaysian University of Science and Technology (MUST) economist, emeritus professor Barjoyai Bardai, that would be at least RM50 a month for motorcycle owners and RM150 for car owners.

“Previously, there was a calculation made, but it was unofficial, venturing that motorcycle owners will get RM30 a month and car owners with a vehicle that had an engine displacement less than 1,000cc will receive RM120. If you follow the amount, it is not enough,” he told Sinar Harian.

Currently, unsubsidised RON 95 sells for RM3.19 per litre, according to unsubsidised fuel outlet Double, which sells the fuel at specialised stations in Perlis. Based on this rate and the present RM2.05 per litre subsidised price of the fuel, a RM150 cash aid would cover the first 131.7 litres of petrol used in a month. At present, the amount of Budi Madani assistance for diesel vehicle owners is RM200 per month.

As for how that assistance can be dispensed, he said the government has at least five methods of distributing petrol subsidies that would avoid leakages. The first two are the use of identity card (MyKad) and the introduction of a new special ID, while the three other methods are cash transfers through debit or credit cards, cash vouchers and the creation of special systems of payment, such as a dedicated e-wallet.

“The identity card is one of the most important foundations that the government needs to focus on if it wants to implement the targeting of RON 95 petrol so that it reaches the target group,” he said.

However, Barjoyai said that attention needs to be paid to ensure that the subsidies reach the right crowd, and so qualification must be determined by complete data provided by the Pangkalan Data Utama (PADU) socio-economic database.

“This system (PADU) will determine how much subsidy can be given through channeling models, whether using cash transfer methods through debit or credit cards, cash vouchers or e-wallets and special IDs later,” he said.

Barjoyai however believes that the move won’t happen so soon, and it will only probably be implemented in June next year at the earliest. “I don’t think petrol subsidy targeting will be made this year because the government needs data from the new diesel subsidy experience implemented in June,” he said.

“Most importantly, the government wants to know the effect on inflation, the price of goods and so on. These statistics will only be known in the third quarter, next October. After obtaining these statistics, there are other matters that need to be examined by the government,” he explained.

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