Malaysia PADU: RON95 Petrol & Diesel Fuel Subsidy 2024 - All You Need to Know


Malaysia PADU: RON95 Petrol & Diesel Fuel Subsidy 2024 - All You Need to Know

Is Malaysia getting a fuel subsidy in 2024? Stay tuned for Malaysia’s RON95 petrol & diesel subsidy update after the launch of PADU here!

Launch of The PADU Database on 2 January 2024, Establishing The Foundation For Targeted Subsidies

Make sure to register PADU HERE & update your details in the recently established PADU database in order to receive the Malaysia petrol & fuel subsidy.

The Prime Minister is launching the "Pangkalan Data Utama," or PADU database on 2 January 2024 at a function in Putrajaya. The Malaysian government's future targeted subsidies and assistance will be built upon this database. To finally bring everything under one roof, the government will use PADU to compile all of the data that is currently available from government departments and agencies. This will enable them to distinguish between Malaysian households that actually need the subsidy and those that can get by without it.

In the near future, household net disposable income metrics will be used to provide a fair picture of the socioeconomic status of every Malaysian household, and PADU will play a major role in how the government retargets subsidies and assistance. Its launch prepares the way for the intended RON 95 petrol subsidy, which is scheduled for the second half of 2024. A targeted electricity subsidy is also included in the plans. 

It was made very clear that the purpose of the event was only to formally launch the database; the announcement of the subsidy determination mechanism would come later. As previously mentioned by Rafizi, PADU will enable the government to switch from the B40-M40-T20 method of determining aid recipients' eligibility to a more focused and equitable assessment of who should be eligible for aid and who shouldn't. The database is safeguarded by what is considered to be a high degree of cyber security.

High-grade cyber security safeguards are in place to protect the database. Regarding accessibility, Rafizi has guaranteed the public that all personal information currently held by government departments or agencies will remain unchanged and that PADU is subject to the laws in effect at the time of acquisition. Though data in the database was collected from multiple government agencies, Malaysians are requested to register on PADU in order to verify and update 39 variables related to their data, thus guaranteeing the accuracy of their information.

It is entirely legal to opt out in order to protect one's data because there won't be any consequences or "action" if you don't update. However, there may be a cost associated with opting out of PADU IF and WHEN the Malaysian government begins to implement targeted subsidies in lieu of blanket subsidies. Having said that, PADU will not merely rely on citizens of Malaysia providing voluntarily submitted information. Additionally, data and information will be gathered from government agencies and industry. 

He advised the public to verify their information to make sure that their data across the 39 variables available was accurate, pointing out that opting out might affect their eligibility for targeted subsidies. You can check and update the following items: home, address, employment, income, and commitments. According to the government, individuals have until March 31 to update their information in the database. This can be done offline for those who don't have internet access or live in rural areas, or online through the PADU portal. In these situations, local authorities, district offices, and village community management councils (MPKK) are the places to register and update details.

Is There Going to Be Targeted Subsidies?

The most recent budget announcement indicates a shift in favor of diesel subsidies. A broad range of diesel users will be eligible for diesel subsidies, though private passenger cars with diesel engines might not. The current cap on diesel prices in Malaysia is RM2.15 per liter. Shell currently lists FuelSave Diesel in Singapore for SGD2.64 per litre, or about RM9.20. Shell FuelSave Diesel was priced at 30 point24 Thai Baht per liter, or approximately RM4 point06, last week in Thailand.

Keep an eye out for rewards for updating your PADU database. Early bird "updaters" are rumored to receive goodies from Touch 'n Go and other service providers.


When will the fuel subsidy (RON95 petrol & diesel) be launched in Malaysia?

After the introduction of the central database system known as PADU in January 2024, targeted subsidies for gasoline and diesel are probably going to be implemented soon, Economy Minister Mohd Rafizi Ramli stated in the Dewan Rakyat earlier this month. The exact date is yet to be determined, but the Malaysian government will launch the targeted RON95 subsidy program in the second half of 2024 (H2 2024) in order to direct our resources as efficiently as possible to those who need them most.

According to Rafizi, a nation where 53% of the fuel subsidies go to individuals in the top 20 (T20) income group is not an equitable nor sustainable model. 


How many percent will the RON95 petrol & diesel subsidy be?

According to the Economy Minister, switching to a targeted system is anticipated to reduce petroleum and diesel subsidy expenditure by 17.5 percent in the year of 2024.

Given what we've seen in other nations, analysts must be wondering why it takes so long. 
Getting everything ready is crucial for the sequencing. In his opening remarks at the National Economic Outlook Conference, which was hosted by the Malaysian Institute of Economic Research (MIER) on Monday, Rafizi stated, "Once we roll it out, it is expected that there will be unhappiness here and there, along with teething problems, but we can't afford the U-turn.". 

Three mechanisms will be used to implement the program: the net disposable income of the individual, the net disposable income of the household through social protection or assistance schemes, and a combination of household and individual earnings that will be implemented through the use of a subsidy card. 

These initiatives are consistent with the government's primary goal of expanding the fiscal framework within which it operates. We have to find new ways to mobilize our resources and cut down on waste in the system because our public finances ran a fiscal deficit of more than 5 percent for three years in a row. Increasing tax collection is one unavoidable aspect of addressing our insufficient revenue. A dynamic, sustainable state is never achieved by spending more money than we have, according to Rafizi.

What is Malaysia PADU?

Are You Ready for the 2024 Subsidy Program? This targeted petrol subsidy program is anticipated to be rolled out gradually beginning in January following the public launch of Pangkalan Data Utama (PADU). For now, the restructuring of petrol subsidies will be rolled out in Peninsular Malaysia first. 
In conclusion, the government can make sure that with this new targeted petrol subsidy mechanism, people who actually need the subsidies will receive them by implementing the PADU system. This initiative, which aims to close the economic gap between low- and high-income groups, is also perceived as an attempt by the government to maintain equity in the distribution of income. 

When will the Malaysia PADU petrol & diesel subsidy program launched?

Registration for the Padu national database is open as of 2 January 2024 and will be used for targeted subsidies. Register HERE.
The Ministry of Domestic Trade and Costs of Living (KPDN) announced via its X (previously Twitter) page that user registration for the nation's central database hub (PADU) will begin on January 2 2024. 
Registrations will be accepted for use in targeted subsidies. It is recommended that all Malaysians who are eighteen years of age or older visit the Padu portal in order to view their profile and update or verify their personal data. A Padu profile will contain 39 distinct pieces of personal data in total.
In the event that an individual does not possess the necessary devices for online registration, they can still register manually in person at places like government agency offices, local district offices, and Digital Economy Centres (PEDi). 

The ministry states that while registration is not mandatory, it is encouraged in order to make sure that Malaysians who qualify for aid—such as targeted subsidies—are not left out or overlooked.
With the system's launch, every household in the nation will have access to a national database of socioeconomic data, which will be updated in "near real-time" and regularly analyzed. 
The goal of Padu's development is to enable targeted policy implementation while facilitating data-driven policymaking and decision-making. The national digital identification system of the nation, MyDigital ID, will eventually be integrated with the system, which has been under development since June 2023.


How Malaysia's 2024 Petrol Subsidy Will Operate?

Earlier in November, Malaysia's Minister of Economics declared that a new targeted petrol subsidy mechanism would be introduced beginning in 2024. Three options were presented during a Q&A session in the parliament, according to a report from Berita Harian, for how the petrol and diesel subsidy restructuring will be implemented beginning in the year 2024. 

The following outlines the three categories in which the new targeted petrol subsidy for 2024 operates: 
- Individual Net Income: 
Also called Net Personal Income - This is the amount left over after income taxes and statutory deductions like EPF and SOCSO. Remember that this does not include any deductions from any outstanding insurance or loan balances. This approach guarantees the government's equitable provision of fuel subsidies in Malaysia. The reasoning behind this is quite straightforward: people with lower incomes might receive more subsidies, while people with higher incomes might receive less. 

- Household Net Income: 
After your statutory deductions, the net income of every household member will be taken into account by this second mechanic. This covers all financial, social, and welfare assistance, as well as your income from your current employment. 

- Combined Household Net Income: 
The third mechanism combines household and individual income. Using financial assistance subsidy cards is part of this mechanism.
Utilizing subsidy cards, which give those in need financial support, is part of this mechanism. This will create a balanced system that allows for more targeted attention to the needs of households and individuals.

So, are you looking forward to the 2024 Malaysia petrol & diesel subsidy?
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