KUALA LUMPUR – Petrol station operators are concerned their businesses will face additional costs and service charges when targeted subsidies for RON95 fuel is implemented mid-next year.
Petrol Dealers Association of Malaysia (PDAM) secretary Bashir Ab Razak told Scoop operators are currently bearing service charges every time a fleet card is used by those eligible for diesel subsidies.
The charge, he said, is borne through a commission system which is due for a review. The government has not revised the commission structure for the past five years and this has caused pressure on operators, he added.
While petrol dealers are not against the move to rationalise subsidies, Bashir said as key stakeholders, they should be engaged on such policies.Â
“It is very unfair when we (operators) have to shoulder additional expenses just to successfully realise the government’s aspirations,” he said, claiming that the Economy Ministry has yet to respond to PDAM’s request to be included in consultation sessions on targeted petrol subsidies.
The association, he said, had written to the ministry in January, but has yet to receive a response.
Asked about mechanisms which could be utilised to implement targeted petrol subsidies, Bashir said cash handouts by the government to eligible citizens would be the best.
He said the government is likely to already have details on eligible petrol subsidy recipients from data in its ongoing Sumbangan Tunai Rahmah (STR) financial assistance initiative.Â
“(Recipients) have a bank account and cash can be credited together with STR aid or monthly. Alternatively, e-wallets or Budi Madani can also be used,” Bashir said.
However, there is a need for mechanisms to ensure that the cash handout is spent at petrol stations, and not elsewhere.
He added that since the Central Database Hub (PADU) probably has the relevant details on petrol subsidy recipients, such as the number of vehicles involved and the amount of fuel needed, there is no need to filter consumers at the stations.
Commenting on proposals to utilise citizens’ MyKad, Bashir cautioned that the method could take some time to implement as transactions involving the identification card might require the use of new equipment.
“From a business perspective, we’re not too keen (on the proposed method) as additional processes will cause delays and increased costs,” he added.
Economy Minister Rafizi Ramli has said that targeted petrol subsidies would involve a two-tier pricing system where only the top 15% income group who are not eligible for subsidies will pay the market price at petrol stations.
The minister also said that the mechanism for the remaining 30 million people not part of the highest income group is being fine-tuned and discussed, adding that the definition of income classifications will also be amended to ensure greater fairness.
In announcing that the targeted petrol subsidy is expected to be introduced sometime mid-2025, Prime Minister Datuk Seri Anwar Ibrahim said the move is necessary as blanket subsidies are currently also benefiting ultra-rich and foreigners. – October 21, 2024