From all to targeted support

KUCHING: The federal government’s review of the RON95 subsidy is set to transition from a broad-brush approach to targeted assistance for specific groups.

Malaysia University of Science and Technology (MUST) economist Prof Emeritus Dr Barjoyai Bardai said that the initial plans to target 2.65 million recipients, with motorcyclists receiving RM30 monthly and car owners with vehicles 1,000cc and below getting RM120.

However, he said, lessons from the recent diesel subsidy adjustments might lead to revisions.

“The subsidy amounts could be increased to RM150-RM200 for cars and RM50 for motorbikes. The key question is the recipient pool size.

“Using the Bantuan Madani scheme’s database of over 9.5 million households receiving RM1,000 aid, the government could extend a RM150 subsidy to all, costing roughly RM70 billion annually,” he told Sarawak Tribune today (July 12).

Abolishing the current RON95 subsidy would signify a shift in Malaysia’s economic landscape.
“We’re moving away from a subsidy-reliant system.

“This could save the government money currently lost to misuse and inefficiencies, including leakages to foreign vehicles and smuggling activities.

“The expectation is to save at least RM15 billion, which could then be channelled into higher-value economic projects.

“Furthermore, this is a nudge for Malaysians to transition from a subsidy-dependent mindset to a more self-sufficient approach,” he added.

Looking towards the long term, he stressed the need for an alternative support system.

“The government should establish a social protection scheme, potentially involving an accredited social protection fund functioning as an endowment,” he said.

Earlier, the Ministry of Economy confirmed the ongoing reevaluation of subsidies, including RON95.

It pledged to refine the targeted RON95 subsidy for smooth implementation and effective aid distribution.