Govt cautious of burdening M40 in targeted fuel subsidy rollout

Putrajaya today acknowledged that it is facing challenges in implementing targeted RON95 fuel subsidies, particularly in ensuring the aid reaches only those who genuinely need it.

Economy Minister Akmal Nasrullah Nasir said the government is still grappling with how to determine the eligibility threshold for the Budi95 subsidy scheme, especially involving the M40 middle-income group.

He said the matter was raised in a recent National Economic Action Council meeting, where Prime Minister Anwar Ibrahim reiterated Putrajaya’s commitment to implementing targeted subsidies.

“The biggest challenge may be determining where that threshold should lie, and this will require consideration from various dimensions.

“That is why one of the challenges we face is ensuring that, in our effort to channel subsidies to the target groups, we do not end up causing a significant shock to those who may still need government support or who may not yet be fully prepared to transition away from it.

“So these are among the key issues being discussed in determining where the dividing line should be drawn between those who should rightfully receive the subsidy and those who may be better removed from the system,” Akmal told reporters in Putrajaya this morning.

Padu use still under consideration

The Johor Bahru MP said the government has yet to decide whether the Central Database Hub (Padu) will be used to classify individuals under the T20 high-income category.

Putrajaya is considering multiple indicators, including individual income levels, Akmal added.

“The details, however, will only be shared once a decision has been finalised, because naturally, when this policy or approach is implemented, we must also provide room for appeals, etc.

“That is why the Economy Ministry has been consistent in our position on the need for a targeted subsidies approach. We believe that assistance should be distributed in a targeted manner,” the minister said.

Previously, Anwar said the government had agreed in principle to withdraw fuel subsidies from high-income earners, but was still fine-tuning the mechanism.

According to the premier, it is looking into the eligibility aspect to ensure the move would not burden the upper-middle-income group. - Mkini