THE government is considering directly banking in the petrol subsidies for the low-income group after discarding the idea of subsidy cards, ministry sources said.

They said the new proposal is expected to be presented at next week’s cabinet meeting for approval, after which it should be implemented late this month, at the earliest.

A source told The Malaysian Insight under the scheme, the recipients are required to open a remittance account to receive the subsidy after they have paid for petrol at regular prices.

“The Finance Ministry has agreed to the proposal, but we still need cabinet approval,” he said.

It is understood the ministry had already appointed vendors for the rejected subsidy card system but will fine-tune the chain to work for the direct payment system.

“The Finance Ministry will adjust the original proposal and bring it to the cabinet. Once approved, the two ministries will have a joint press conference to make the announcement,” he said.

The government in November last year announced petrol subsidies for the lower income group, with Domestic Trade and Consumer Affairs Minister Saifuddin Nasution Ismail saying the mechanics would be finalised in February.

No new developments have been announced since.

It is also not clear why the government wishes to switch to the direct paying scheme when it was all set to go with the subsidy card system which will be applied based on the Bantuan Sara Hidup database.

The Finance Ministry mooted the subsidy card but the Domestic Trade and Consumer Affairs Ministry prefer to bank in the subsidies, sources said.

They said industry players had also objected to the subsidy card.

It could be problematic relying on BSH data to identify the recipients as those who qualify for cash aid may not be eligible for the petrol subsidy. Likewise, those who are eligible for the petrol subsidy may not be in the BSH database. 

The government is likely to set a deadline for the recipients to register.

Officials in the two ministries are now finalising the report for the cabinet, sources said.

Malaysia Petrol Dealers’ Association president Khairul Annuar Abdul Aziz, meanwhile, said the government consulted petrol station operators late last year but has not done so this year.

Khairul said the government had asked the stakeholders for their input, and they had reverted with requests for clarification on several issues, including how long the government will take to remit the subsidies.

Another issue is the potential wrath of customers being charged different prices, who may then blame the retailer for the discrepancy.

Khairul said the industry is not against subsidies but needs to know more. – July 1, 2019.