Economy Minister Rafizi Ramli has said that the targeted subsidies for petrol and diesel will likely be implemented after March 2024, with three different mechanisms currently being considered. This comes as he prepares to submit his proposal for the subsidy rationalisation plan to the Cabinet for approval this month.

Of the three approaches that have been outlined, the first method will focus on determining a recipient’s eligibility based on individual net disposable income, with the subsidies to be delivered through social protection schemes. The second approach, meanwhile, will rely on household net disposable income as the determining criteria, with subsidies provided through a hybrid of social assistance and social protection schemes.

As for the third approach, the government will determine the recipient’s eligibility based on both individual and household disposable income, and the subsidies will be implemented through subsidy cards.

“Besides the form and mechanism of targeted subsidies, the Cabinet will also decide on implementation and follow-up plans. These include communication, engagement, and support plans to alleviate the burden of the people, which will be coordinated by the entire government machinery,” Rafizi further said, adding that the Central Database System (Padu) must be rolled out first in January so that the public can update and verify their data for the subsidy rationalisation plan.

Briefly, Padu is a database developed to collect and combine socio-economic information of the public, which can then be used by the government to improve its policy and decision-making processes, as well as implement financial assistance programmes.

Aside from sharing these details, Rafizi also took the opportunity to stress that only Malaysians will be eligible for the subsidies provided under the rationalisation plan. “The common denominator of rationalised subsidies is that they are only for citizens. That is why the three methods I mentioned earlier involve direct transfers to eligible Malaysian individuals or households,” he said.

For context, the matter of targeted subsidies has long been discussed by the government – since the start of the Covid-19 pandemic – with extensive studies conducted for its implementation. Since then, the Ministry of Finance has considered various methods to disburse the relevant subsidies to those who are deserving of it, including using e-wallets, and more recently, the MySejahtera mobile app. If approved, Rafizi’s proposal for the subsidy rationalisation plan will provide a resolution for this issue.

(Sources: The Edge Malaysia, The Star)

• TAGS:
• Blanket Fuel Subsidy
• Blanket Subsidies
• Diesel Subsidy
• Fuel Subsidy
• Government Subsidies
• Petrol Subsidy
• Rafizi Ramli
• Targeted Subsidies
• Targeted Subsidy Mechanism