New fuel subsidy plan will create black market, PKR MP warns Putrajaya

Motorists line up to purchase petrol before the price hike at midnight, at a gas station in Putrajaya, outside Kuala Lumpur on September 2, 2013 in this picture released on September 3, 2013. — Reuters pic
Motorists line up to purchase petrol before the price hike at midnight, at a gas station in Putrajaya, outside Kuala Lumpur on September 2, 2013 in this picture released on September 3, 2013. — Reuters pic

KUALA LUMPUR, June 3 — Putrajaya’s plan to sell fuel at different subsidised rates to different income groups may create a “black market”, PKR’s Pandan MP Rafizi Ramli said today.

The PKR leader said the government’s bid to limit or deny high-income Malaysians’ access to subsidised fuel could end up creating an illegal trade and result in an abuse of the system among those in the lower-income categories.

“I worry if this new subsidy system is not refined and openly discussed, when it is implemented in the future, it will create a black market for petrol and diesel that will create a new and larger problem than the existing smuggling because it involves even more people and the public,” the outgoing PKR strategic director said in a statement today.

The new scheme would only perpetuate the fuel subsidy leakages that it is aimed at reducing, he said.

Rafizi also warned that the proposed new scheme may cause the price of goods to soar further amid the already worrying rise in living costs and stagnant wages.

The federal government should not push on with plans to revise the current subsidy scheme for petrol and diesel without discussing it with taxpayers and tabling it in Parliament next week, Rafizi said.

“The public needs to be given sufficient time, at least one year to give their views before the new petrol and diesel subsidy system comes into effect, taking into account the difficulties already faced by the public due to price hikes of petrol, electricity, sugar and other necessities,” he said.

According to the PKR federal lawmaker, recent news reports said that those earning less than RM5,000 each month would be entitled to continue buying fuel at the subsidised rate.

Citing the reports, he said those earning between RM5,000 and RM10,000 would be allowed a monthly quota of subsidised fuel and would have to pay market price once they exceed the quota.

Those who earn RM10,000 each month would have to pay the full price for the fuel they buy.

Last Sunday, national news agency Bernama reported that Putrajaya will roll out a new scheme by this September 1 to only sell subsidised fuel to eligible commercial vehicles.

The new scheme is expected to help the government save RM9.8 billion, Domestic Trade, Cooperatives and Consumerism Ministry’s secretary-general Datuk Seri Alias Ahmad said.

Alias said a similar system for privately-owned vehicles would be introduced this October or November, with more details to be announced soon.