Tiered fuel plan scrapped; Govt will not increase price for now

Friday March 5, 2010

By MAZWIN NIK ANIS

The Star Online

PUTRAJAYA: The Government has officially scrapped its plan to introduce the two-tiered restructuring of fuel subsidy following negative feedback from the public.

Domestic Trade, Co-operatives and Con­sumerism Minister Datuk Seri Ismail Sabri Yaakob said the decision was taken because the Government did not want such an important policy devoid of public support or acceptance.

“Prime Minister Datuk Seri Najib Tun Razak has stated that this is the people’s Government and it is open to views. Today, the Government has proven that we are not rhetoric and we truly hold on to our words.

“We have heard the people’s voices and now we have proven that we are willing to scrap the plan because the rakyat do not want it,” he told reporters here yesterday.

Ismail Sabri said the price of fuel would remain the same for now as “there was no directive to announce any hike”.

“I don’t know when that will happen but the public must remember that fuel price fluctuates.

“Foreigners can still purchase fuel according to petrol pump price. But the policy governing the sale of petrol to foreign-registered vehicles at border areas remains,” he said, adding that the ministry would be proposing to the Cabinet another “policy for foreigners”.

Foreign-registered vehicles are only allowed to pump a maximum of 20 litres at petrol stations within 50km radius from the border.

Ismail Sabri said the Government was subsidising nine sen more now in addition to the 30 sen it was already forking out for every litre of RON95 due to the commodity price increase.

Last year, the Government forked out RM3.4bil to subsidise petrol and RM1.9bil for diesel.

The plan, originally set to be implemented on May 1, was to introduce a two-tiered pricing system for petrol based on engine capacity while foreigners would have to pay the market price.

It called for the mandatory use of MyKad to differentiate Malaysians from foreigners, requiring the need for MyKad readers at petrol stations.

Ismail Sabri also said that a subsidy rationalisation laboratory headed by Minister in the Prime Minister’s Department Datuk Seri Idris Jala was studying the implementation of government subsidies.