Thursday 28 Mar 2024
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KUALA LUMPUR (Oct 15): The government is doing a study on the petrol subsidy mechanism for the M40 middle income group and the outcome of the study could be ready as early as March next year, which will pave the way for the inclusion of the M40 group in the government's targeted fuel subsidy programme or PSP.

"For M40, it will be ready by March 2020, and we plan to follow the card [approach]. Let us study this matter, and when the mechanism is ready, we will make the announcement," Finance Minister Lim Guan Eng told reporters on the sidelines of the inaugural International Directors Summit 2019 here today.

He added that his ministry will be making the relevant announcements on the matter on the conclusion of the study.

The card he is referring to is Kad95, a special fuel subsidy card that allows motorists who are not Bantuan Sara Hidup (BSH) recipients to be able to get a discount of 30 sen per litre, limited to 100 litres per month for cars or 40 litres per month for motorcycles, when purchasing RON95 at petrol stations.

A measure under PSP that he announced during the tabling of Budget 2020 last Friday, the card will be implemented progressively during the first quarter of 2020.

Meanwhile, for eligible recipients of the BSH, a RM30 per month petrol subsidy will be given to car owners and RM12 per month for motorcycle owners. This subsidy will be in the form of cash transfer, deposited into the recipient's bank account every four months. The first payment will be made in April 2020 for the period of January to April 2020.

The PSP will be launched in Peninsular Malaysia in January next year, after which RON95 and diesel retail prices will be gradually floated, to reduce leakages and cross-border smuggling of subsidised fuel which is estimated to cost the government millions of ringgit.

The fuel subsidy scheme will kick in whenever the RON95 market price, determined by the Automatic Pricing Mechanism (APM), is above RM2.08 per litre. No fuel subsidy will be given when the market-determined APM price falls below RM2.08 per litre.

The government will allocate RM2.2 billion for the proposed scheme, which will benefit more than eight million motorists.

As for motorists in Sabah and Sarawak, they will continue to enjoy a fuel price ceiling of RM2.08 per litre for RON95 and RM2.18 per litre for diesel.

If the governments of Sabah and Sarawak would like to participate in the PSP, the Federal Government is ready to accept the request, Lim said when presenting the national budget at Parliament.

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