In a bold and rather all-encompassing statement, International Trade and Industry Minister, Azmin Ali said, “Those with BMWs cannot enjoy the same subsidies as those driving Kancils,” as was quoted by Bernama.
The government is apparently planning a targeted fuel subsidy system that will likely see the rich paying more. At the time of print, it is unclear whether the definition of rich will be following the classification of economic tiers in Malaysia - B40, M40 and T20.
Targeted fuel subsidies for B40 but how?
Previously Finance Minister, Tengku Zafrul Tengku Abdul Aziz was quoted, “Golongan kayangan atau kumpulan T20 lebih banyak menikmati subsidi yang diperuntukkan oleh kerajaan berbanding B40.”
This move is to cushion the impact of rising crude oil prices, Azmin was quoted as saying.
He went on to add that the fuel subsidy mechanism will be targeted and meant to benefit the lower-income group.
While this may sound good in theory, its application and mechanism are paramount to its success. Read here for how at present the T20 is benefitting more from our fuel subsidies compared to the B40 income group.
“Those with BMWs cannot enjoy the same subsidies as those driving Kancils,” Bernama quoted Azmin as saying during a press conference at the recent trade and investment mission to the United States.
But what if the BMW is not a modern-era BMW? What if it's an E30, E36, or E39? We hope to bring you more clarity on this matter as the story develops.
For the present week, the price of RON97 has gone up a further RM0.02 to RM4.33 per litre while the price for RON95 remains at RM2.05 per litre and Diesel at RM2.15 per litre.
When do we expect the government to announce this new fuel subsidy mechanism, what will it be, how will it be implemented, and ultimately how will it affect middle-class Malaysians are all still question marks at the moment.
My colleague Jim Kem took a stab at proposing some ideas on how the fuel subsidy mechanism could work out here in Malaysia. You can read about it here.