THE government is studying the mechanisms for targeted fuel subsidy, so that it is not open to abuse and would reveal it later, said Lim Guan Eng.

“What is definite is that those driving luxury cars will not get it,” the finance minister said at the Parliament lobby today.

Lim was responding to social media criticism that the fuel subsidy for individual owners of cars with an engine capacity of 1,500cc or less could end up benefiting those who drive luxury marques with lower engine capacity.

“The government initially wanted to target the B40 group only but upon consideration, may extend a bit to the M40 group,” said Lim during the post-Budget 2019 press conference.

But Lim urged Malaysians to be patient as the new fuel subsidy will start only in June next year.

“This is only scheduled to take place in the second half of 2019.”

Yesterday, Lim announced that the government will provide a subsidy of 30 sen per litre of RON95 for up to 100 litres a month for cars with an engine capacity of less than 1,500cc and 40 litres per month for motorcycles up to 125cc.

As many as four million car owners and 2.6 million motorcycle owners are expected to benefit from this subsidy. The subsidy, however, will not extend to owners of multiple vehicles.

The price of RON95 is currently fixed at RM2.20 per litre, while the price of RON97 is set according to market prices.

On another matter today, Lim also said the government was still committed to fiscal consolidation, although it will be done over three years.

“Fiscal consolidation will be done over three years from 3.7% (in 2019), 3.4% (2020) and lower than 3% the following year.

“The reason why we want to do it in three years instead of all at once is because the people’s social economic welfare should be given priority.

“We also want to grow the economy or else we could slip into a contraction. We don’t want that to be happening although there is already some belt-tightening,” said Lim.

He said among the tightening was the cost-cutting measures for some RM19 billion worth of contracts.

“The benchmark was a minimum 10% savings on RM19 billion of projects already signed by the previous government.

“If they don’t want (to cut), we will re-tender the projects.

“But I’m confident that the contractors will agree as many of these projects were entered through direct negotiation or limited tenders where the prices were inflated,” said Lim. – November 3, 2018.