KL scraps unpopular fuel scheme

THE Malaysian government has scrapped its plan to introduce a two-tiered fuel scheme that would have rationed subsidies and ended them altogether for some drivers, following negative feedback from the public.

Domestic Trade, Co-operative and Consumerism Minister Ismail Sabri Yaakob said that the government nixed the planned subsidy restructuring as it did not want to implement an important policy that did not have the people’s support.

Some analysts suggested that the move may mean that polls are imminent in the important East Malaysian state of Sarawak.

Datuk Seri Ismail Sabri told a press conference yesterday: “Prime Minister Najib Razak has said that this is the people’s government… Today, the government has proven that this is not mere rhetoric and that it is true to its word.

“We have heard the people’s voice and, now, we have proven that we are willing to scrap the plan because the people do not want it to be done.”

Mr Ismail Sabri said that the price of fuel remained the same for now, as “there is no directive to announce a petrol-price hike. I don’t know when that will happen, but the public must remember that the fuel price fluctuates”.

Last year, the government forked out RM3.4 billion (S$1.4 billion) to subsidise petrol and another RM1.9 billion to subsidise diesel. Fuel-subsidy cuts were a cornerstone of Datuk Seri Najib’s plans to cut the budget deficit to 5.6 per cent of gross domestic product this year, from an over-20-year high of 7.4 per cent last year.

The government had wanted to introduce a management system for the fuel subsidy, as it felt the subsidy did not fully benefit the intended target groups and that even owners of foreign-registered vehicles were enjoying it.Make a Mark in Your Career with a Top UK Hons Degree at Kaplan

The plan, originally set to be implemented on May 1, was to introduce a tiered pricing system for petrol, depending on engine capacity, while foreigners would have to pay the market price.

It called for the mandatory use of the national identity card, known as MyKad, to differentiate Malaysians from foreigners, requiring a need for MyKad readers at petrol stations.

Subsidised petrol for each vehicle owner would have been capped, with the subsidy rate determined by engine capacity.

The subsidy was to have been limited to motorists whose vehicles had a maximum engine capacity of 2,000cc. Owners of cars with bigger engine capacities would not have qualified for a subsidy.

On the matter of foreigners, Mr Ismail Sabri said that “in the meantime, foreigners can still purchase petrol according to the pump price, but the policy governing foreigners when purchasing petrol at the border areas remains”.

Last December, the government announced that foreignregistered vehicles would be allowed to pump only a maximum of 20 litres of fuel at petrol stations within a 50km radius of the border.
Mr Ismail Sabri dismissed talk that the restructuring plan had not been viable because it would have been difficult to implement, claiming that a study conducted showed that it could be done without much hassle and inconvenience, and did not result in a long wait for consumers whose MyKads had to be scanned.

What they annouce is the scraping of tiered subsidy from 1 May for Malaysians. Sporean still subject to 20lit cap.

M’sia scraps tiered grants
by THE MALAYSIAN INSIDER 05:55 AM Feb 25, 2010KUALA LUMPUR – The Malaysian government is looking at simpler ways to subsidise fuel for consumers after scrapping the proposed tiered fuel subsidies scheduled for May 1.

Industry sources said Putrajaya made the decision “recently” after complaints that the new subsidy system, where buyers have to show their identity card when making a purchase, could cause congestion at petrol stations and incur more costs for petrol dealers.

“Oil industry executives have been asked to stop implementing the tiered subsidy system as the government has stopped it,” an industry source told The Malaysian Insider.

A consultant working on the programme confirmed the move, saying “the decision was made fairly recently”. He added that the tiered subsidy system “was just too complex”.

Under the programme, motorists had to register using their Mykad, an identity card cum smart card, to purchase petrol at a subsidised rate.

Mr Hashim Othman, president of the Petrol Dealers Association of Malaysia, said that the system could lead to congestion as more time would be needed to verify the vehicle owner’s identity.

“People on the ground are worried that the thumbprint scan … may delay transactions and create congestion at petrol stations,” The Star quoted him as saying this week.

Petrol dealers complained that the system would lead to additional costs for them, diminishing their profits of 12 sen (5 cents) per litre for petrol and 7 sen per litre for diesel.

RON95-grade petrol is currently sold at RM1.80 a litre, RON97 and diesel at RM2.05 and RM1.70 a litre respectively.

The government has never announced the tiered fuel subsidy system, only saying that foreigners would not be eligible for subsidised prices.

There is speculation that the government will raise retail prices by 10 sen in the short-term while mulling proposals for a better subsidy system.

In 2007, the authorities raised retail prices until they peaked at RM2.70 a litre, leading to widespread protests and contributed to the ruling Barisan Nasional’s historic election losses in 2008.

No notice and pump not triggered to stop at 20 litres, juz carry on own time own target..

No wonder the usual tattered malaysian govt letter glued to the Mobil petrol pump has been taken off.

Hahaha…malaysia boleh lah!!

This is extremely unfair to Mobile, Petronas, BHP and Caltex which do not carry V-Power.

Many of them are pretty reluctant as looking at the situation, the MY Govn aren’t even sure whether the policy could be carried out efficiently with people Q’ing at the counter for subsidized petrol.

Not sure whether is this true or not.