Malaysia is planning to use 3 methods to channel petrol and diesel subsidies in 2024! Here is what we know so far…
Malaysia To Use 3 Methods For 2024 Petrol + Diesel Subsidies
On Monday, 6 November 2023, Economy Minister Rafizi Ramli revealed that Malaysia will use three methods to channel petrol and diesel subsidies in 2024, after the government has household income data from the PADU (Pangkalan Data Utama) central database hub that will is expected to be completed in January 2024.
According to Rafizi, the government has identified several ways to channel the petrol and diesel subsidies, but the new system will only be implemented if the cabinet approves the proposal to be presented this month (November).
The coordination of diesel and petrol subsidies is planned for 2024, through the implementation of Padu which is expected to be completed in January next year.
In addition to how the subsidies would be implemented, the engagement plan will be announced after the cabinet’s decision is reached through a proposal that will be presented this month (November).
The plan will be implemented after the cabinet’s decision is reached, in line with the engagement plan (of Padu implementation) which is set to balance the speculative inflation risks.
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2024 Petrol + Diesel Subsidies To Be Based On Net Income
Rafizi said that the three methods will be based on net individual and household income.
- The first method is based on the individual’s net income, which is the person’s take-home pay, after taxes.
- The second method is based on the household’s net income through social protection or assistance schemes.
- The third method is based on a combination of household and individual income, but implemented through a subsidy card.
Firstly, the subsidy provision will be based on an individual’s net income through a social protection scheme, whereas the second method will involve the net income of the households through a combination of social protection and social assistance.
Thirdly, it will be based on both individual and household net income eligibility, where a subsidy card will be implemented. Following this, specific decisions on the methods will be announced based on the specified targets in the future.
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According to Rafizi, the proposed scheme for 2024 petrol and diesel subsidies was based on a nationwide survey conducted in June, to identify subsidy methods that would be suitable for Malaysians.
The planning for diesel and petrol subsidies has already taken place through several meetings held by the government since May with the Finance Ministry, Domestic and Consumer Affairs Ministry, the Prime Minister’s Economic Planning Unit as well as Bank Negara Malaysia (BNM).
Hence, it can be said that the proposal (for the subsidy rollout) is the result of input provided by the government, economic experts as well as the people.
Apart from that, the cabinet will also establish a communication, engagement and support plan to alleviate the people’s burden, which will be executed as a unified effort by the entire government machinery.
The proposed 2024 petrol and diesel subsidies programme will only involve peninsular Malaysia, with diesel subsidies to be reduced in phases. The reduction in diesel subsidies will not involve Sabah and Sarawak, due to the extensive use of diesel in those two states.
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