REBATES will underpin Putrajaya’s new petrol subsidy for lower-income Malaysians to prevent leakages and misuse, said Domestic Trade and Consumer Affairs Minister Saifuddin Nasution Ismail.

Eligible individuals will receive a card that they swipe at all petrol stations every time they fill up on RON 95 petrol.

At the end of the month, 30 sen will be credited into their bank accounts for every litre bought up to a maximum of 100 litres or RM30, Saifuddin said.

“When a T20 individual and the B40 person go to a petrol pump, they both pay for RON 95 petrol that is based on the weekly price.

“But the difference is that the B40 person will get money at the end of the month, which will be pumped in by the government,” Saifuddin told The Malaysian Insight.

Households in Malaysia are categorised as low income or B40, middle income or M40 and top income or T20. This is broken down to 40% each for both low- and middle-income groups and 20% for top income earners.

The card is to record an individual’s monthly consumption of petrol which will then determine how much they receive at the end of the month, he said.

“Say if you use up only 50 litres of petrol, then the rebate will only be RM15.”

The government will install the system nationwide and expects to test it in several states in March. The full rollout is expected to begin in the second quarter of this year, he said.

“We are currently polishing the system so that the recipients don’t have to apply for the subsidy every month. The card tracks their monthly usage.”

The targeted petrol subsidy system was announced in Budget 2019 and will only be given to owners of non-luxury cars with engine capacities below 1.500cc and motorcycles below 125cc.

Recipients will receive a maximum of 100 litres per month while motorcyclists will get 40 litres per month. The subsidies will cost the government RM2 billion in 2019 and expected to benefit four million car owners and 2.6 million motorcycle owners.

The targeted petrol subsidies are the latest measures by Pakatan Harapan to help low-income folk deal with rising living costs.

Other initiatives include expanding the list of items whose prices are controlled year-round and stopping exports of food when domestic supplies are low.

Another initiative his ministry is looking at is how to encourage Malaysians to buy fresh food online and to nurture a market around this practice, he said.

Although Malaysians shop online for clothes, personal care products, electronics, non-perishable goods and even prepared food, they have yet to transition to buying fresh food through the internet, Saifuddin said.

The theory is that just like prices for non-food items, prices for food sold through online stores could be dramatically slashed because traders would save on costs that would otherwise need to be spent on rent, labour costs and utilities at brick-and-mortar stores.

“The practice is booming in China where there is an online trader that specialises in fresh food. So, we are studying how to make the practice acceptable here.” – February 22, 2019.