COMMENT | Soft-pedalling on RON95 subsidies is bad

COMMENT | Soft-pedalling over removing subsidies for RON95 petrol and a system of identity card verifications for those eligible is likely to cause implementation problems and raises questions over its efficacy in reducing government expenditure.

There is a lack of clarity over who will be eligible for the subsidy, with the government maintaining it will target the top 15 percent of income earners for full price without saying how they will be determined.

What happens if you have wealth but limited income, for instance?

The government will end up subsidising most people in the food chain, which means that the amount saved may not be much, especially since oil prices remain depressed.

In a press announcement in July, Prime Minister and Finance Minister Anwar Ibrahim said, “When the RON95 targeted subsidy is implemented, Malaysians will enjoy a lower RON95 price of RM1.99 per litre.

“This will certainly benefit around 18 million car drivers and motorcyclists, including...