Fuel subsidy for RON95 raises even more questions than answers

You must be wondering, how in the world does this work? Would it even work? Even the government has yet to elaborate on the mechanics of this new scheme.

Among all the automotive related announcements, we’re only going to focus on two aspects – tolls and fuel subsidies.

Increments on toll charges for inter-city highways will be put on hold in 2019, a move which will cost the government RM700 million.

As for fuel, here’s where it gets interesting. Each litre of (petrol or diesel) qualifies for a RM0.30 subsidy, limited to a maximum of 100 litres per month. The scheme is expected to be effective in Q2 of 2019.

That’s something like RM30 in “savings” from roughly three and the half tanks of fuel for a Myvi? Helpful? Sure, but it certainly isn’t life-changing though; especially when the owners of these 1.5-litre cars and below are the ones who require significant government aid.

In hindsight, the scheme kinda indicates how in-tune the government is, to the auto industry. European (luxury) car manufacturers have significantly reduced their engine capacities with BMW, Mercedes-Benz, Honda, Volkswagen, MINI and even Renault offering vehicles with 1.5-litre engines (albeit turbocharged) or lower.

Do the owners of these cars really need government aid?

Mercedes-Benz Malaysia just launched the facelifted C200 Avantgarde with a new 1.5-litre turbocharged engine.

Four million car owners are expected to benefit from the scheme which will cost the government RM2 billion annually, although owners with multiple cars will not receive this benefit.

On the surface at least, it already sounds like a vague mechanism that’s waiting to be exploited by loopholes. Let’s get a little more imaginative here.

Imagine if someone (who already owns a car) were to buy a car each for his/her children, and places it under their name?

That makes him/her a financially-able person but on paper, he/she technically only owns one vehicle. Would he/she still be eligible for the scheme meant for those who are less capable financially?

We can’t wait to see how that pans out!


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