SHAH ALAM – Former Economy Minister Datuk Seri Rafizi Ramli claims that the implementation of the RON95 subsidy targeting scheme, which offers a price of RM1.99 per litre to citizens, does not guarantee a fair distribution of petrol subsidies.
He said this happened because high-income households usually owned more vehicles, with almost every adult holding a licence and owning a car.
“In my view, it is not (fair) because wealthier households tend to have more vehicles and each adult in the household is likely to have both a licence and their own car.
“The total subsidies going to these affluent households are much larger than those received by less well-off households, such as those in the bottom 40 (B40) and middle 40 (M40) income groups,” he said in a Facebook post on Monday.
Rafizi said that this showed the implementation of the RON95 subsidy targeting scheme was more about subsidy quotas limitation rather than truly directing assistance to those in need.
“From the perspective of retargeting subsidies, the approach taken, in my opinion, cannot really be considered subsidy targeting, but rather limiting the subsidy allocation for each household,” he said.
He added that the impact of the policy differs depending on household categories and whether they are located in rural or urban areas.
In rural areas, regardless of income levels, residents are expected to see some savings with a reduction of about six sen per litre, while their fuel consumption patterns are unlikely to change much.
“The greater impact will be on urban residents who consume more petrol for commuting to work,” he said.
As an example, he said that urban M40 families with two vehicles will face higher monthly petrol costs if consumption exceeds 300 litres per month.
“For T20 households, there will also be an increase, but the financial impact on affluent households will not be as significant as the effect felt by the M40,” he said.