Price cap on RON95 petrol may be removed

PUTRAJAYA: The cap on the price of RON95 petrol may be removed once the government subsidy, which is expected to be limited to recipients of the Bantuan Sara Hidup (BSH), comes into effect.

Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail told a media briefing that the government would decide later whether the cap would be maintained or not.

In February, the government announced that the price of RON95 petrol would be capped at RM2.08 for all users regardless of any increase in global oil prices.

“We have two options.
“We could remove the cap once the targeted subsidies come into effect, or we could maintain it.
“The Cabinet has not decided on this yet.

“We will also have to decide on whether the targeted subsidies will be based on the current capped price, or on a float pricing system,” he said.

It was reported that the government was looking at introducing a targeted petrol subsidy to benefit BSH recipients, and banking in money directly into the accounts of those eligible each month.

Saifuddin said the ministry planned to use the BSH to finalise the number of those eligible for the aid, and was currently awaiting the updated information from the BSH secretariat before it can proceed.

The issue with the “banking-in” method, he said, was that currently, about 10% of individuals in the database did not have bank accounts.

The ministry, he said, had engaged with several banks to help these individuals, who are mostly located in rural areas, set up bank accounts for this purpose.

“If the Cabinet agrees that this method is best, we can immediately start disbursing the funds to recipients at the end of each month.

“We are keen on using this method, among other methods that have been proposed,” he told reporters yesterday.

If the method proves to be successful, he said, it would be extended to other future subsidies, such as for cooking oil and flour.

“The savings we get from this more efficient form of disbursement can be used to enable more Malaysians to enjoy the petrol subsidy – particularly the M40 group (middle 40%).

“This is the long-term plan,” he said.

Asked when the subsidy would come into effect, he said the ministry was awaiting the updated BSH database, which should be ready “very soon”.

“They are currently cleaning up the data and are at the final stages

“We want to ensure the data is credible – the deserving must be included and those who do not deserve assistance must be removed,” he said.- Star