Domestic trade minister: RON95 price cap may go once direct petrol subsidy arrives

RON95 is currently capped at RM2.08 per litre. — Picture by Ahmad Zamzahuri
RON95 is currently capped at RM2.08 per litre. — Picture by Ahmad Zamzahuri

KUALA LUMPUR, April 23 — The federal government may remove the price ceiling for RON95 petrol once targeted subsidies for low-income earners are fully introduced, according to Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail.

According to The Star, the minister also told a press briefing yesterday that this was not yet decided.

RON95 is currently capped at RM2.08/L.

“We have two options. We could remove the cap once the targeted subsidies come into effect, or we could maintain it. The Cabinet has not decided on this yet.

“We will also have to decide on whether the targeted subsidies will be based on the current capped price, or on a float pricing system,” he was quoted as saying.

When tabling Budget 2019, Finance Minister Lim Guan Eng announced that owners of cars below 1,500cc and motorcycles below 125cc are eligible for a 30 sen subsidy on RON95 petrol, with a 100L monthly allowance for cars and 40L for motorcycles.

The government previously said this could be deposited directly to qualified recipients who are also part of the Bantuan Sara Hidup direct cash aid scheme, but the exact mechanism is still not finalised.

Saifuddin said the subsidy will come into effect “very soon”, but his ministry is still waiting on information from the BSH secretariat before it finalises the number of BSH recipients that will receive aid.

On the proposal for direct deposits of the subsidy, Saifuddin said he was supportive as it would allow the measure to be quickly implemented.

However, he highlighted that this method would exclude around 10 per cent of qualified recipients as they do not maintain bank accounts.

To overcome this, he said his ministry has asked several banks to help these individuals, who mainly reside in rural areas, to set up bank accounts so they can receive the subsidy.

According to The Star, Saifuddin added other subsidies that include those for cooking oil and flour may be implemented this way, if the direct deposit of targeted aid proves effective.

“The savings we get from this more efficient form of disbursement can be used to enable more Malaysians to enjoy the petrol subsidy — particularly the M40 group (middle 40th percentile).

“This is the long-term plan,” he was quoted as saying.