KUALA LUMPUR: One of the companies bidding for the concession to manage the impending National Fuel Subsidy Rationalisation Programme has proposed a Multi-Tier Price Setting (MTPS) system for the distribution of subsidised fuel to deserving Malaysians.
Icash Global Rewards Sdn Bhd has proposed the “1Malaysia Fuel Card”, not the MyKad, for Malaysian-registered vehicles to track their weekly subsidy entitlement and consumption.
Its managing director, Roslan Nyak Kassim, told the New Sunday Times yesterday he was confident that the system would eliminate subsidised fuel smuggling and leakages.
“It will ensure that subsidised fuel reaches the target groups at affordable prices, while allowing for savings for the government.”
He said the MTPS system would not require petrol stations to install additional devices or alter their existing system, adding that it would allow the government to monitor the volume sold by each petroleum company.
Roslan said the mechanism would increase the efficiency of the government’s subsidy disbursement.
“The government determines the parameters (price, quota, duration, and individual and engine capacity) for the subsidy allocation for the target groups, senior citizens and retirees using the system.”
Roslan said it would allow the authorities to monitor on-screen all fuel purchases at petrol stations and standalone pumps in real time.
Critics say one of the drawbacks of the proposal is that it focuses on vehicle groups rather than end-consumer groups, meaning that it may benefit rich folk who drive small cars.
It is understood that Icash is seeking RM800 million in capital expenditure from the government to operate the scheme and a commission of three sen per litre of fuel sold.
Roslan said the MTPS system would leverage on a four-tier system in allocating the entitlement for the subsidy, where the maximum amount of fuel would be set with the subsidised pricing.
For tiers 1 and 2, he said, a weekly quota of subsidised fuel would be allotted for the target groups, while for tier 3, fuel would be sold to non-target groups at cost price. Tier 4 is catered to foreign-registered vehicles, where the pricing will be determined by the government.
Icash is one of seven companies that have submitted their proposals to the government to plug loopholes in the subsidised fuel distribution system to more than 10 million Malaysians.
The other firms bidding for the concession are MyEG Services Bhd, IRIS Corporation Bhd, Fuelsubs House Sdn Bhd and MOL AccessPortal Sdn Bhd, as well as two foreign-based entities. Fuelsubs House is a partnership between Pos Malaysia Bhd and Datasonic Group Bhd.