Fuel subsidy mechanism for M40 ready by March 2020


The government is currently carrying out a study on the mechanism for the petrol subsidy programme (PSP) for the M40 middle income group, and the results are expected to be ready towards the end of the first quarter next year, according to finance minister Lim Guan Eng.

“For M40, it will be ready by March 2020, and we plan to follow the card [approach]. Let us study this matter, and when the mechanism is ready, we will make the announcement,” he said. He added that the finance ministry will make the relevant announcements on the matter when the study is concluded, The Edge reports.

At last week’s Budget 2020 tabling, it was revealed that there would be another category for the PSP, with a “Kad95” being issued to those whose household income are below RM4,000, but are not eligible for BSH for various reasons (thus categorised as M40). Lim had said that Kad95 system would be implemented progressively in the first quarter of 2020.

Under the scheme, motorists who are not cost of living aid (BSH) recipients will be able to enjoy fuel subsidy of 30 sen per litre on RON 95 fuel, limited to 100 litres per month for cars and 40 litres per month for motorcycles.

This translates to a cap of RM30 for cars and RM12 per month for motorcycles, which is the same amount BSH recipients get, although the latter group gets the amount banked in automatically to their accounts every four months (with the first payment in April 2020).

Once the PSP is introduced in Peninsular Malaysia in January 2020, the RM2.08 per litre price cap in place for RON 95 is set to be removed, and its price will be floated. Based on the finance ministry’s latest Automatic Price Mechanism (APM) calculations (for the period of October 12-18), RON 95 petrol would be priced at RM2.37 per litre without the price cap.


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