Govt Looking At 3 Methods To Roll Out Targeted Fuel Subsidies In 2024

Economy minister Rafizi Ramli has revealed that the government has decided on three different methods to roll out targeted subsidies for diesel and petrol.

Right now, the government is in the process of collecting and combining household income data. This is being compiled through its Central Database Hub (Padu). After this is completed, the targeted subsidies will be implemented next year.

Subsidies to be implemented after household income database is ready

Targeted subsidies of diesel and petrol subsidies is planned for 2024 as outlined in Budget 2024. 

The implementation stage will only come after the cabinet approval is obtained on the targeted subsidies proposal to be presented this month, Rafizi said during minister’s question time in Dewan Rakyat, today.

This will be through the implementation of Padu which is expected to be completed in January next year.

Rafizi was responding to a question from backbencher Khoo Poay Tiong (PH-Kota Melaka), who enquired regarding the engagement programmes between the government and stakeholders, ahead of the targeted subsidies roll out next year.

Three methods to implement targeted fuel subsidies

According to Rafizi, the three methods used will involve subsidy provisions based on an individual or a household’s net income, and will be allocated through social protection or social assistance schemes.

The first method will be based on individual net disposable income. Meanwhile the second method will involve the net income of households through a social protections scheme.

As for the third method, it will be a combination of household and individual earnings. This method will likely be implemented using a subsidies card, Rafizi said in his reply in Dewan Rakyat.

Subsidy rationalisation was one of the things introduced by the Prime Minister, Datuk Seri Anwar Ibrahim during Budget 2024’s tabling. According to him, the retargeting of subsidies is a necessary move to prevent leakage.