2189) NEWS STRAITS TIMES 27/10/2014 – Different Subsidy Tiers For Fuel?
27 Oct 2014
KUALA LUMPUR: THE impending fuel subsidy rationalisation programme, to be rolled out next year, should have tiers of subsidies for different levels of income, said consumer rights activist Datuk Nadzim Johan.
He said such a system, if adopted by the programme, would ensure that the distribution of subsidies was fair and would reach the intended target groups.
Nadzim, who is the chief activist for the Malaysian Muslim Consumers Association, said for the system to work, the government needed to have comprehensive data on individuals’ incomes and assets.
“Another option is for those who wish to be eligible for subsidised fuel to apply for the benefit. The applicants will then have to declare their monthly incomes and monetary allowances as well as their debts, covering all types of loans.”
Nadzim said the declaration of incomes, assets and debts would help the government obtain a clearer picture of one’s purchasing power and determine which tier the person would come under.
“If a person drives a small car, for example, he or she will need a certain amount of petrol each week.
“For someone with a fixed income of RM3,000 a month and who drives his father’s luxury car, he uses a different amount of petrol than a person driving a smaller car.
“How will the government address and solve this?”
Nadzim said those eligible for subsidised fuel should also be allotted a specific amount of fuel each week for their consumption.
“Such a limit for each individual will prevent others from different tiers from using other people’s monthly allocation.
“Once an individual finishes his allocation, he or she can purchase fuel at non-subsidised rates until the week or month ends, depending on which cycle the system adopts.”
Last Thursday, Deputy Finance Minister Datuk Ahmad Maslan had said that those in the high-income bracket would have to pay market price for RON95 petrol from June next year.
He had said the mechanism and method of implementation were being finalised by the Finance Ministry and the Domestic Trade, Cooperatives and Consumerism Ministry.
Ahmad had also said that a similar system would be implemented for diesel in January, through the use of fleet cards.
Economist Professor Dr Hoo Ke Ping suggested that the type of vehicle owned by an individual should be one of the factors to determine whether one is eligible for subsidised fuel and its quota, either on a weekly or monthly basis.
“If the government uses MyKad or a specific subsidy card, a specific amount of fuel may be set in the card,” he said, adding that the type of vehicle plays a big role in an individual’s daily or monthly expenses.
Speaking of identifying people deserving of help, Hoo said it was a simple technical procedure.
“The government should also embark on a campaign to create public awareness about the programme,” he said, adding that this would avoid any public backlash.