Last Friday’s tabling of the budget by Prime Minister Datuk Seri Anwar Ibrahim revealed that the government intends to implement targeted subsidies for RON 95 petrol starting mid-2025. In his speech, Anwar says that the system will be a two-tiered system, with only a new “T15” category of Malaysians being affected with the unsubsidised petrol; the other 85% of Malaysians can continue to enjoy subsidised fuel as before.
But what exactly is “T15”? While these terms (traditionally B40, M40, and T20) usually refer to household income classifications, economy minister Rafizi Ramli has clarified that the government will be considering more factors than just gross income to delineate the population groups in Malaysia.
As reported by Bernama, Rafizi Ramli told reporters at the National Statistics Day 2024 Celebration yesterday, “I can confirm that the new method will not depend solely on gross household income. We are currently working on improvements based on net household income.
“It will also consider several other factors. Once that’s finalised, we can then set the statistical lines (for population groups) such as B40 and T15… The group that will no longer qualify for subsidies is what we refer to as the T15. We are in the process of defining exactly who falls into this category,” he added.
The Ministry of Economy, along with the Finance Ministry, the Department of Statistics, and other relevant agencies, will run simulations to finalise the “cutoff” for the T15 category. As for the remaining 30 million people in Malaysia, Rafizi says that the mechanism for subsidy disbursement is currently being fine-tuned and discussed by the government for effective implementation.
The PADU database will most likely play a role in determining subsidy eligibility, as it was first proposed since the platform was unveiled earlier this year. For diesel, the targeted fuel subsidies are instead disbursed through two separate programmes: the Subsidised Diesel Control System (SKDS) 2.0 for companies, or BUDI Madani designed for agricultural smallholders.
RELATED: Perodua’s first EV will be priced under RM100k – still due for 2025?
The implementation of fuel subsidies at the petrol stations could also involve the use of MyKad, as suggested by transport minister Anthony Loke Siew Fook, but while that may solve the individuals’ identity problem at the fuel pumps, it will not help when it comes to subsidies for companies.
Based on the fuel prices published by Double Petrol, a non-subsidised petrol station in Perlis, the non-subsidised daily price for RON95 is currently RM2.76 per litre. The subsidised RON95 petrol, meanwhile, is capped at a maximum price of RM2.05 per litre since February 2021, as part of an update to the Automatic Pricing Mechanism (APM) for fuel prices here in Malaysia that has been in use since January 2019.
ALSO READ: Subsidy leakage dropped 78% after floating diesel price, says KPDN
