In Local News, Malaysian Fuel Prices / By Anthony Lim / 7 October 2019 4:16 pm / 64 comments

The government has finally revealed details of its targeted fuel subsidy scheme for RON 95 petrol, the new petrol subsidy programme (PSP) being outlined by domestic trade and consumer affairs (KPDNHEP) minister Datuk Seri Saifuddin Nasution Ismail earlier today.

Benefits of the scheme, which is slated to begin in January next year, will only be provided to eligible B40 recipients based in Peninsular Malaysia, as The Star reports. The subsidy scheme will not incorporate Sabah, Sarawak and Labuan, with the government saying that the price of RON 95 in the two states and Labuan will remain capped at RM2.08 per litre.

Saifuddin said this is because it does not cost so much for the government to subsidise RON 95 in East Malaysia, given that there are more diesel car users there.

It was also announced that the current price cap of RM2.08 per litre for RON 95 will be removed and the fuel floated – like RON 97 is presently – once the PSP kicks off.

Details of the scheme are as follows:

The subsidy will only be given to car/motorcycle owners, and is limited to one vehicle per recipient. If a person owns a car and a motorbike, then he/she will receive the higher subsidy, which is for the car. The car or motorcycle must be registered under the recipient’s name.

The subsidy rate will be capped at RM30 a month for car owners, and RM12 a month for motorcycle owners.

The government will reimburse the subsidy once every four months, so car owners will receive RM120 and motorcycle owners will receive RM48 every four months. The payment method will see cash being directly credited into the recipient’s registered bank account. The first payment is scheduled for April 2020.

Only those who are entitled for cost of living aid (BSH) assistance, with their names listed in the BSH database for receiving such allowances, will be able to receive the new petrol subsidy. All handicapped people will also be given the subsidy.

The household income of the recipient must not be more than RM4,000 per month.

To qualify, a recipient can only own a maximum of two cars and two motorcycles at any one time in his/her household. See the info-graphic panel above for a clearer picture of what vehicle combination qualifies and what doesn’t.

For cars, the pre-requisite is that the engine displacement must be:

– 1,600 cc or below

– or above 1,600 cc, but only for cars that are 10 years old and above

For motorcycles, the pre-requisite is that the engine displacement must be:

– 150 cc and below

– or above 150 cc, but only for motorcycles that are seven years old and above

Saifuddin said that a total of 2.9 million people are expected to benefit from the new subsidy scheme, which will cost the government about RM65.4 million a month. This is lower than the average of RM133 million it says it currently spends weekly in fuel subsidies.

He said that if the price of petrol drops below RM2 per litre, the government will relook at the subsidy and may defer its implementation.

Without the price cap in place, RON 95 petrol would actually be priced at RM2.30 per litre this week based on the finance ministry’s Automatic Price Mechanism (APM) calculations. For the previous week, that price would have been RM2.49 per litre without the cap.