Targeted Fuel Subsidy Pilot Test – B40/M40 to get e-wallet credits, but people have to pay higher fuel prices?

However, much more on Targeted approach to fuel subsidies is being planned by the government. Earlier this week, Tengku Finance Minister Datuk Seri Zafrul Tengku Abdul Aziz said that the targeted subsidy mechanism is being testedand that the system will be tested for three to six months before it is deployed.

Now, one potential method that can be used for the format has been pointed out and it takes the form of a digital wallet. This was revealed by Datuk Johan Mahmood Merican, Deputy Secretary General for Treasury Policy of the Ministry of Finance.

Speaking on BFM‘S The Breakfast Grille yesterday morning, he said that tests using the e-wallet are already underway. “We have started testing with gas stations using the e-wallet platform. We’re looking at another three to six months of testing before it’s ready to go, because that’s something we don’t take lightly,” he said, without providing any details on how the system works. motion.

He said the government needs to make sure that everyone will be able to use the system. “People in urban areas may be very familiar with e-wallets, but this may not be the case in rural areas or for the elderly, so we need to make sure that it is really something that is easy to use. use and when deployed nationwide, do not create too many problems for rakyat”, he said, adding that the ministry will also continue to consider other methods.

Earlier, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said that a a large portion of fuel subsidies under the current scheme enjoyed by the top 20% of earners in the country, at RM8 billion against RM6 billion, benefiting from the bottom 40% (B40).

The government is hoping to solve this problem by modifying the electricity and petrol price subsidy scheme to be more targeted and more focused on those in need. Johan reiterated that the current imbalance means that the removal of the synthetic fuel subsidy is required from financial point of view.

“When looking at the household spending survey, we note that on average a typical B40 family spends around RM165 a month on fuel, while the T20 spends around RM500. They are subsidized three times more than the B40,” he said.

He said the challenge will be how to get the B40 to enjoy subsidized prices, but higher earners have to pay higher prices. “The question is how do you segment it? How do we design a mechanism where the pump price is higher but the mechanism allows defined groups such as lower income or even M40 to be able to buy at least one fuel quota at subsidized prices? grant? “

One way that could be done, he said, is to “try to replicate what we experience for our Tenaga (electricity) bills, where you consume less, you pay lower, that’s what it is.” We’re trying to do it.”

“The implementation challenge was that, while the electricity bill was one meter per house, more than one person in a household could go to buy fuel, so we needed a system that could adapt. and will allow us to allow target groups (B40 and M40) to access subsidized fuel,” he explained.

There are many questions, many in fact, because no one knows the mechanism of the system that will be used. Whether this format is related to RON 95 gasoline prices and diesel prices will be phased out entirely, with those in the targeted B40/M40 grouping to be subsidized with an electronic credit to offset fuel purchases. Whether?

Is there a defined monthly credit, with the first RM100 or RM200 fully subsidized, with the price then increasing as usage increases (even if you’re in the target group), in a way that works? dynamic of electricity bill format? Does this mean that fuel payments can only be made electronically (non-cash) for subsidies?

There are many other questions, including how the new system will work in preventing price increases elsewhere (as fuel prices rise due to mass subsidy removal), but until When it comes to details, it’s all conjecture. What is your opinion on the e-wallet perspective? Share your thoughts with us in the comments section.