MyKad could serve as a mechanism for diesel subsidy distribution, says expert

SHAH ALAM - The use of MyKad as a mechanism to distribute diesel subsidies has the potential to be expanded to improve the current system while reducing leakages and misuse including fuel smuggling.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the MyKad-based approach has proven effective through the implementation of the RON95 petrol subsidy under Budi Madani RON95 (BUDI95), which is more structured and easier to monitor.

"The system not only makes it more convenient for users, but also allows the government to monitor fuel consumption more effectively and identify any form of misuse.

"If we look at what has been implemented under BUDI95, the MyKad mechanism has worked quite smoothly and is user-friendly.

"It also makes it easier for the government to track usage and detect misuse such as smuggling," he told Sinar.

At the same time, Afzanizam said the main issue surrounding diesel subsidies does not lie in the policy itself, but rather in weaknesses in its implementation mechanism.

He said one of the key problems is that eligible recipients are sometimes left out due to administrative factors or system limitations.

"They are eligible, but due to administrative issues, they are excluded. So to address this, the use of MyKad can help resolve such problems.

"A MyKad-based system also enables data integration across government agencies, which can speed up the verification process and ensure assistance reaches the targeted groups more quickly.

"The government’s intention is to help those who qualify. The challenge is how to deliver that assistance accurately, efficiently and with minimal exclusion," he said.