The introduction of targeted fuel subsidy in 2024 might see only a selected chunk of M40 income group to be given subsidised fuel.
Kenanga Research stated they believe that part of the M40 group may be cut off from subsidised fuel upon the introduction of targeted fuel subsidy due to unsustainable financial burden of the existing setup, where a considerable 35 % of the RM 77.3 billion subsidy in 2022 was utilized for fuel subsidies that substantially benefitted the wealthier T20 group.
The B40 income group, on the other hand, is expected to receive fuel subsidy without discrimination.
Targeted fuel subsidy relies on the new PADU database, where recipients will be identified using a “net disposable income” criterion. This enables the government to further refine fuel subsidy recipients even within a specific income group. PADU is a computerised database that stores and manages information from various government arms and agencies, including LHDN and JPJ.
The government is set to introduce the targeted fuel subsidy when presenting Budget 2024 in Parliament on 13 October 2023, as a replacement for the current blanket fuel subsidy. Expect changes to take effect from 1 January 2024.