We hope that it will not be a Sisyphean task for the Madani government to remove the blanket fuel subsidy that began for diesel in 1999 and petrol in 2005.
Sisyphus was a sleazy Greek legend who was punished with the unremitting task of rolling a boulder up a steep hill. Just before the huge stone reached the top, it would magically tumble back to the bottom.
Word is that the Madani government will use battery capacity as the main criteria to formulate a road tax structure for electric vehicles (EV), which will be implemented starting 1 January 2026.
Currently, EVs pay nothing in road tax as part of a bundle of tax waivers designed to incentivise ownership.
Previous federal ministries have tried many things to achieve green mobility targets but with no success.
One notable underachievement is that of electric motorcycles. Malaysia’s failure to take its place alongside Vietnam, not to speak of India and China, in terms of penetration is attributable to the government agencies tasked with transitioning combustion two-wheelers to electricity not factoring the huge disparity in performance between combustion and electric motorcycles.
For electric commercial vans, however, it’s a price factor. Even with their zero-tax rating as EVs, their entry level price starts from RM280,000, while a popular combustion van such as the Toyota HiAce is half the price without range issues.
After a year of budget incentives for EVs, it has become obvious that corporations will need to be incentivised to transition from combustion to electric vehicles and motorcycles.
Singapore has its EV early adoption incentive programme which provides up to S$20,000 for individuals and corporations to purchase full EVs.
The second underachievement of the Madani Government is the lack of data transparency in the EV and automotive sector.
Prime Minister Anwar Ibrahim last year launched an EV dashboard called MEVNET, the acronym for Malaysia EV charging network. This public domain website, developed by the housing and local government ministry jointly with the natural resources and environmental sustainability ministry, is the epitome of governmental under-reach and good material for a case study on organisational underperformance due to non-accountability.
The transport ministry should also publish data on vehicle sales according to fuel type on a monthly basis. This has been practised by Singapore’s land transport authority which has a time series from 2013 with 9 categories of fuel types (diesel, petrol, petrol electric, petrol electric plug-in, petrol CNG, CNG, electric, diesel-electric, and diesel-electric plug-in), cross-referenced to five vehicle categories (cars, taxis, motorcycles, goods and other vehicles and buses).
Economy minister Rafizi Ramli would be better empowered by data transparency from the transport ministry.
Going forward, here are some tips on how the Malaysian government can make sure its plans to stop fossil fuel subsidies, bring in new road taxes for electric vehicles (EVs) based on battery size, and end the road tax holiday for EVs can all work together smoothly.
It must first get everyone on the same page regarding plans to stop blanket fuel subsidies, introduce new EV road taxes and explain how these initiatives all line up with the big goals for a greener Malaysia. Keeping everything in sync will help things run more smoothly.
It’s important to chat with different groups like car companies, EV makers, transport operators, environmentalists, and regular Malaysians to get their thoughts and concerns. Getting everyone’s input can help solve problems and find common ground.
Having a clear step-by-step plan is key. Lay out what needs to happen, when, and how to pull off cutting fuel subsidies, and incentivise the energy transition by EV friendly tax policies for targeted high carbon footprint commercial groups.
Check in regularly on how the changes are going – like if people are shifting to EVs, how much new taxes it is bringing in, and what impact it has on the environment. Likewise, the subsidy of RM2,400 for an electric motorcycle will probably miss its year-end sales target but we will never know unless there’s more data transparency.
Give training to government workers, businesses and others so they’re clued up on thermal and carbon pollution from combustion engines. Educating people so that they know their stuff will help ensure changes are managed well.
Observe what’s worked in other places like Indonesia when that country stopped fuel subsidies. Learning from what’s gone right elsewhere can give some solid ideas for Malaysia. Let’s hope.
Yamin Vong can be reached at his Facebook page, yamin.com.my - FMT
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.
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