The Business Times

KL links fuel subsidy to income

Sceptics say proposed mechanism too complicated and doubt if it can be implemented efficiently

Published Mon, Oct 27, 2014 · 09:50 PM

Kuala Lumpur

IN A bid to reduce fuel subsidies, Malaysia intends to implement a multi-tier system of fuel purchases based on income eligibility.

On Monday, the country's Second Minister for Finance Ahmad Husni Hanadzlah said Malaysians whose monthly income exceeds RM10,000 (S$3,890) would not be entitled to subsidised fuel but those earning less than RM5,000 would receive a full subsidy. Those in the RM5,000-RM10,000 income bracket would get a partial subsidy.

A few days earlier, Deputy Finance Minister Ahmad Maslan said the system makes use of the national identity card or MyKad - this prevents foreigners from buying subsidised fuel - and that "high-income" earners would have to buy fuel at market rates. Going by Mr Ahmad Husni's comments, the high income threshold…

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