Sorry, T20 Malaysians, but you’re not getting that fuel subsidy

A man refuels his vehicle at a petrol station in Kuala Lumpur November 2, 2018. — Picture by Yusof Mat Isa
A man refuels his vehicle at a petrol station in Kuala Lumpur November 2, 2018. — Picture by Yusof Mat Isa

KUALA LUMPUR, Nov 3 — The government’s engine-based fuel subsidy mechanism will not benefit those driving luxury cars after all.

Datuk Saifuddin Nasution Ismail explained today that eligibility for the aid will also be determined by income level, among others.

The domestic trade and consumer affairs minister explained that the scheme had yet to be finalised and will contain additional criteria that were not part of the Budget 2019 announcement yesterday.

Saifuddin said vehicle age may also be used as a determinant when deciding on recipients for the targeted subsidy scheme.

He then explained that the new structure was part of the government’s bid to be fiscally responsible with subsidy spending to ensure that money spent in this area goes to those that most need or deserve it.

“So, for the T20, I ask that they not feel slighted as the T20 have higher incomes...” he was quoted as saying in Kulim, Kedah, today by national news agency Bernama.

Finance Minister Lim Guan Eng proposed yesterday a targeted subsidy scheme of 30 sen/L for a maximum of 100L a month for owners of cars with engine capacities below 1,500cc and 40L for owners of all motorcycles below 125cc.

This drew concerns from the public that the mechanism could possibly benefit owners of some luxury and premium cars.

Auto manufacturers have been pursuing fuel efficiency as part of or in lieu of alternative energy efforts, resulting in smaller engine capacities in recent small and city cars.

Among vehicles that would have qualified for the subsidy if engine capacity were the only criteria include the Audi A4 and Q3 (1.4L), the BMW i8 and 318i (1.5), the Mercedes-Benz A200 (1.3L), and the Mini Cooper Clubman and Countryman (1.5L).

Brands such as Honda, Mazda, Peugeot, Renault and Toyota are other non-national cars that have vehicles that would have qualified under such a scheme.

RON95 and diesel are currently subsidised as the new government froze pump prices immediately after winning federal power in May.

The government will revert to the weekly managed float mechanism once the targeted subsidy mechanism is implemented.