BANGI: THOSE in the high-income bracket will have to pay the market price for RON95 petrol from June next year.
Deputy Finance Minister Datuk Ahmad Maslan said the mechanism, which was being finalised by the Finance and Domestic Trade, Cooperatives and Consumerism Ministries, would be either through the use of MyKad or other cards.
He said this after presenting a talk on the Goods and Services Tax for senior officers of the Regional and Rural Development Ministry and its agencies here yesterday
Ahmad said those in the low- and middle-income groups would continue to pay for RON95 at the subsidised price.
“This system is fairer, as only those eligible will receive the subsidy,” he said, adding that a similar system would be implemented for diesel in January, through the use of fleet cards.
Sources told the New Straits Times that the use of MyKad to verify the income status of its holder was “seriously being considered” as part of the new mechanism to sell RON95 at the market price.
“There have been several proposals on how to handle the fuel subsidy rationalisation. These are being looked into carefully as this (issue) affects everybody,” said a source.
The subsidised price of RON95 is now RM2.30 per litre.
Domestic Trade, Cooperatives and Consumerism Ministry secretary-general Datuk Seri Alias Ahmad said 77 applications to develop mechanisms for the sale of RON95 petrol had been received.
“They have been given 21 days to develop a system since Oct 15. We will review the systems and choose the best.”
Alias said once a company had been selected, it would be given four months to carry out a pilot test in certain areas and regions.
The RON95 and diesel subsidy rationalisation would affect about 18 million petrol vehicles and 780,000 diesel vehicles.
“The new system for diesel has gone through several tests, including user acceptance and final assembly tests. We are in the early stages for the petrol sale system.”
Earlier this month, Prime Minister Datuk Seri Najib Razak had said a new mechanism for fuel subsidy would be announced soon.
He had said the move was to ensure a more targeted subsidy, taking into account public readiness for subsidy rationalisation.
Najib, who is also finance minister, had said the government was allocating more than RM21 billion a year to subsidise RON95 petrol, diesel and liquefied petroleum gas.
“As a result, the allocation for subsidies has increased 14-fold, from RM1.65 billion in 2002 , to RM23.5 billion last year, solely to maintain the low retail price.
“This is because of the increase in the number of vehicles, from 13.6 million in 2008 to 23.7 million last year,” he said when tabling the 2015 Budget on Oct 10.
Najib had said the government was committed to implementing subsidy rationalisation.
“The rationalisation aims to ensure a more targeted subsidy, and reduce leakages and smuggling. The government will ensure that the subsidy rationalisation is implemented in stages so that it does not burden the people.”
It was reported last month that the new mechanism for diesel would save the government between RM5 billion and RM6 billion annually.
Last year, the government spent RM9.92 billion on the diesel subsidy, more than double the RM4.03 billion it spent in 2010. At the same time, the government lost 3.5 billion litres of subsidised diesel to smuggling.
The New Straits Times had reported on Oct 16 that the retail petrol price could be revised downwards if global oil prices continued to fall.
Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek had said while the government had no immediate plans to revise the price, it would monitor the price of crude oil before reviewing the fuel price.