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The government’s new targeted RON 95 petrol subsidy scheme will ensure that only those who need the subsidy will obtain it, said prime minister Tun Dr Mahathir Mohamad. He said that it will put an end to the existing manner of subsidising petrol, which benefited even those rich enough to drive a Rolls-Royce.
“Some driving a Rolls-Royce have subsidies. We cannot support this. That is why only owners of cars below 1,600 cc will be eligible for subsidy and the subsidy is only for those in the B40 group with only one car, not more. This is to ensure that the aid reaches those who really need assistance. Not to those who own up to two or three Rolls-Royces, but still obtain government subsidy, ” he said.
He added that the decision to limit the subdidy to one car per individual was also to ensure that there would be no abuse of the system, The Star reports. According to Mahathir, a study by the government found that some individuals in the B40 group owned up to six cars.
“That is why we will only allow the subsidy for one car only. We are not giving subsidies to the rich (within the group) as well,” he said.
Under the new petrol subsidy programme (PSP), which is slated to begin in January next year, eligible recipients in the B40 group will receive RM30 a month (for car owners) and RM12 a month (for motorcycle owners).
The government will reimburse the subsidy once every four months, and so car owners will receive RM120 and motorcycle owners will receive RM48 each time, with the amount being directly credited into the recipient’s registered bank account. The first payment for the scheme is scheduled for April 2020.
The targeted subsidy scheme – which is expected to benefit 2.9 million people – will only be given to car and motorcycle owners based in peninsular Malaysia who are also recipients of the cost of living aid (BSH). The subsidy scheme will not involve East Malaysia, where the price of RON 95 in Sabah, Sarawak and Labuan will remain capped at RM2.08 per litre.
The government has also announced that the current price cap for RON 95 will be removed and the fuel floated once the PSP kicks off next year.