PUTRAJAYA has postponed its fuel Targeted Subsidy Programme (PSP), which was to roll out next month, as it needs more time to register recipients and inform the public on how it works.

Domestic Trade and Consumer Affairs Minister Saifuddin Nasution Ismail said in a statement today that the cabinet, in a December 18 meeting, had decided to defer the implementation of the programme.

“Until the plan is implemented, the current arrangement on fuel subsidies will continue.” 

Putrajaya had set an allocation of RM2.2 billion for the PSP, set to benefit about eight million motorists.

Finance Minister Lim Guan Eng had said beginning January, two categories of people in the peninsula would benefit from the PSP, a Pakatan Harapan election pledge.

“The first category comprising recipients of the BSH (cost of living aid) will get a petrol subsidy of RM30 a month if they are car owners or RM12 a month if they own a motorcycle.

“This subsidy will be given in the form of cash transfers and will be credited into the recipient’s bank account every four months. The first payment will be made in April 2020 for the period January to April 2020,” he said when tabling Budget 2020 in the Dewan Rakyat in October.

He had said the second category of eligible motorists who were not BSH recipients would receive the Kad95, which would enable them to enjoy a fuel subsidy of 30 sen per litre up to 100 litres per month for cars or up to 40 litres a month for motorcycles.

Lim had said Kad95 would be introduced in stages in the first quarter of 2020.

“When this fuel subsidy is implemented, the retail price of RON95 and diesel will gradually be floated, and this will reduce leakages and cross-border smuggling of subsidised fuel, which has cost the government losses amounting to millions of ringgit.”

Analysts, such as pollster Ilham Centre, had warned that Putrajaya would risk losing popularity if it proceeded with its targeted petrol subsidy plan, which also entails the gradual floating of fuel prices to market rates.

“PH has lost the perception war. People will not care what kind of mechanism is used because what they see is the petrol price going up,” Ilham Centre’s research head Dr Mohd Yusri Ibrahim had said at a forum last month. – December 30, 2019.