PUTRAJAYA’S revised fuel subsidy scheme targeting lower income earners should be complemented with improved public transport to assist the middle class or M40 group, who will not benefit from the subsidy, a national consumer body said.

Federation of Malaysian Consumers’ Associations (Fomca) executive council member Mohd Shani Abdullah said the government should improve public transport by providing more buses, which would help those in the M40 group, since they would have to pay for RON95 fuel at floated prices when the subsidy scheme begins in January.

“We understand the government wants to target the B40 group, but the M40 group, while they may have better earnings than the B40, should also be given alternatives.

“These alternatives can be in the form of improvements to the public transport system and better connectivity to their doorsteps, which can be achieved by increasing the number of buses,” Shani told The Malaysian Insight in an immediate reaction to the government’s announcement today.

The price of RON95 fuel will only be floated in Peninsular Malaysia next year, and not Sabah and Sarawak, where it will still be capped at RM2.08 per litre, Domestic Trade and Consumer Affairs Minister Saifuddin Nasution Ismail announced earlier today.

Meanwhile, only eligible recipients in the lower income group will receive subsidies of between RM48 and RM120 quarterly, depending on the type of vehicle they own.

This works out to RM30 per month for car owners, while motorcycle owners will receive RM12 a month. The subsidy will be deposited into their bank accounts.

Those eligible must already be recipients of the government’s cash aid programme, Household Living Aid (Bantuan Sara Hidup).

They must also own cars with 1600cc engines and below, or cars more than 10 years old and with engines larger than 1600cc.

For motorcycles, those with engines of 150cc and below will qualify, as will those who own older motorcycles of seven years and above with engines of more than 150cc.

Shani agreed that methods under the previous government had been wasteful as the government’s fuel subsidy had benefited all groups of people, even if they could afford costlier petrol.

However, he cautioned that the payment method under the targeted subsidy scheme could also be abused.

“We won’t know whether the recipients will really use it to subsidise their petrol usage or for other purposes,” he said.

Azih Muda, president of the civil service union Cuepacs, also urged the government to include the M40 because it already paid income tax.

“The M40 group pays taxes and yet they do not qualify for this subsidy. They will be the ones having to bear more living costs,” he said.

Azih added that some might consider the subsidy of RM30 a month for car owners and RM12 a month for motorcycle owners “too little according to their individual expenses”.

“Whereas, the government is viewing the subsidy in terms of a cumulative amount.”

Saifuddin today said the subsidies will cost the government RM65.4 million a month and will benefit 2.9 million people.

Azih added said that some B40 recipients might still find the amounts unhelpful, especially if they lived on the city outskirts and had to travel farther distances to work.

“Many B40 people live on the outskirts of urban areas, and they end up using more fuel.” – October 7, 2019.