The launch of dedicated fuel stations selling non-subsidised fuel in Perlis may only affect foreign-registered vehicles near our northern border with Thailand, but it does offer a clear view of what to expect if, or rather when the targeted fuel subsidy programme is implemented. Ladies and gents, without government subsidies, RON95 petrol is priced at RM3.22 per litre in Malaysia.
Oh yes, that’s a huge RM1.17 per litre increase over the current subsidised price of RM2.05 for RON95. In other words, that’s 57% more expensive that what we are used to paying now. So if you are constantly spending say, RM300 on fuel every month as it is, you’ll be looking at coughing up RM471 without subsidies. That’s an extra RM171 every month.
Of course, that’s taking an overly simplistic view of things. As it is, we don’t know when the targeted fuel subsidy mechanism will be implemented and more importantly, how it will be worked out. Those that fall “outside” the targeted brackets, will they pay the full market price, or will they still receive some (but less) subsidy?
How one is deemed either eligible or undeserving of fuel subsidies is unclear too. So far, we’ve been told that the government will use your car’s engine capacity data as a measure, although the exact threshold is still unknown.
Back in 2018, the then-government proposed a cut-off limit of 1.3 litres – if your engine is any bigger, you won’t get any subsidy. That threshold was increased to 1.5 litres in Budget 2019, and then again to 1.6 litres soon after. In the last update, it was also added that if your car has an engine bigger than 1.6 litres, but is older than 10 years, you’d be eligible.
For motorcycles, the cut-off was set at 125 cc, and then upped to 150 cc. For bikes with bigger engines, it would have to be more than seven years old to be eligible. This was all supposed to start in January 2020, but it was never implemented due to the combination of Covid-19, MCOs and of course, the changing of governments.
As of end of 2022, Domestic trade and cost of living (KPDN) minister Datuk Seri Salahuddin Ayub added that beyond sheer engine size as per JPJ data, the government would also look at additional relevant information from the inland revenue board (LHDN), Bank Negara Malaysia (BNM), Khazanah Nasional and the department of statistics Malaysia (DOSM) to deem whether or not you would be eligible for fuel subsidies.
Again, the exact mechanisms and thresholds are still unknown so far. On the basis of income levels, would only the B40 be eligible? And if so, would the cut-off points be different from state to state? And what about fuel meant for business or company use – will it depend solely on the individual person doing the refueling? The questions and permutations are endless.
For now, it is expected that the targeted fuel subsidy programme will be included in the revised Budget 2023, which will be tabled in the Dewan Rakyat next week on February 24 by finance minister and prime minister Datuk Seri Anwar Ibrahim. Will our questions be answered then?
The post Unsubsidised RON95 is RM3.22/litre in Malaysia – ready to pay 57% more with targeted fuel subsidy? appeared first on Paul Tan's Automotive News.
* This article was originally published here
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