Govt will not implement petrol subsidy programme, Dewan Rakyat told

The Domestic Trade and Consumer Affairs Ministry and the Finance Ministry (MoF) have decided not to implement the petrol subsidy programme (PSP), the Dewan Rakyat was told today.

Deputy Minister of Domestic Trade and Consumer Affairs Rosol Wahid said this was decided at a meeting of the two ministries on July 9, and the MoF had been entrusted to prepare a Cabinet Memorandum on the government's stand on the PSP.

"The reasons for not implementing the PSP are first, to avoid misunderstanding among residents of Sabah, Sarawak and the Federal Territory of Labuan because only people in peninsular Malaysia would be involved in this subsidy.

"And (second) to avoid creating a wide gap in petrol prices between peninsular Malaysia, and Sabah, Sarawak and Labuan," he said.

He was replying to a supplementary question from Shaharizukirnain Abd Kadir (PH-Setiu) on the government's plans on petrol subsidy.

On Dec 18, 2019, the Cabinet decided to defer indefinitely the implementation of the PSP, which had been scheduled for January 2020.

Rosol said the decision not to proceed with the PSP was also to avoid creating doubts among the people on the transparency of the subsidy scheme.

He said one aspect which could give rise to such doubts was the fact that the M40 group would enjoy discounts when filling up their tanks using a petrol subsidy card.

The government had on Oct 7, 2019 announced the implementation of the PSP involving an allocation of RM2.4 billion.

The allocation, under Budget 2020, was expected to benefit eight million people in the B40 and M40 groups.

It was reported that RON95 petrol consumption in the country was around 14.4 billion litres per year, which means the subsidy to be borne by the government for RON95 alone would total RM4.32 billion annually.

MoF has set the ceiling price for RON95 at RM2.08 per litre.

Today, RON95 is retailed at RM1.68 per litre, compared to RM1.72 per litre last week.

-- BERNAMA