New fuel subsidy structure: updates for Tuesday

As you are reading this, the Cabinet Commitee on Inflation meeting regarding our country’s fuel subsidy system has already been running for about more than half an hour.
The results of this meeting will be announced possibly later today and be implemented starting from tomorrow, according to the PM.
There has been a few updated bits and piece of info released by the media today, hinting at what the final restructured fuel subsidy plan will be.
Here is what we know at the moment:

The government is currently studying two methods of delivering subsidies - based on cash income and based on quota.
What has been repeated many times in the past is that those who can afford to pay market rates should pay for them so I think we can assume that subsidies based on cash income is a go, but the question here is whether those who qualify for subsidies will have a quota set on how much subsidies they can enjoy.

I think quotas make sense to prevent someone with subsidies to profit from selling subsidised fuel on the black market to those who do not qualify for subsidies.

Someone with low income should also get just enough subsidies for the bare necessities of commuting, this is to discourage wastage of subsidised fuel.

The PM wishes for the new subsidy structure to be implemented from tomorrow onwards, but I think we can realistically see it some of it implemented tomorrow and the rest in stages leading towards a full implementation in August.

There will also be no controlled prices for fuel in August 2008 onwards. This means that the market price will be determined by the fuel companies. This could also lead to different stations offering different prices for fuel.

We still do not know whether fuel tax will be added to the market price for petrol As a higher market price is already a big shocker for most people, what I think is that the initial market price will not have fuel tax, but fuel tax may be added later.

The ban at the northern border preventing foreign cars from filling up is now in effect, with the Singaporean border ban to be applied later. This ban only affects cars. Foreign-registered motorcycles can still fill up their fuel unrestricted.

UPDATE 3:37PM: Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad says that the full new subsidy system cannot be decided immediately, so only initial details will be announced tomorrow, with the full picture to be unveiled in August 2008. He also added that the fuel subsidy mechanism could involve the following methods:
a) cash income subsidies
b) quota system tied to MyKad or car registration number.

With this latest piece of news, a market price at pump for petrol may not be introduced from Wednesday onwards as previously indicated. The market price is likely to be truly insane compared to what we are used to - in the high RM3 range, close to RM4 per liter.

article from paultan.org

chinese version
八月油价不受管制随市场浮动届时国内燃油价格飙升100%？

国内贸易与消费人事务部长沙里尔沙末宣布，一旦政府在今年8月落实新的燃油津贴制度后，汽油与柴油的价格将不再受到管制。

沙里尔今日在吉隆坡主持一项活动后指出，一旦新制度落实后，我国的燃油价格将反映全球市场的价格，并随之波动. 他表示，政府正考虑实行两种燃油津贴机制，即“现金收入”和制定固打制。

若跟随市场价格浮动，目前每公升售价1令吉92仙的汽油，届时可能与邻国的售价看齐，飙升约100%，至每公升4令吉左右。

阿都拉明天公布新制度框架根据
《法新社》报道，沙里尔指出，首相阿都拉将在今天主持内阁反通膨委员会会议后，在寻求明天的内阁会议批准后，才会公布燃油津贴新制度的框架。

“我们有很多微小的经济因素和课题必须解决，因此我不认为全盘的津贴制度将在今天或明天公布。”
“我们希望在全盘计划公布之后，全国的燃油将根据市场价格浮动。”

沙里尔昨日表示，我国边境50公里范围内的油站，禁止销售汽油给外国车辆，只是一项暂时性的措施，直到政府在8月完成全盘燃油津贴制度为止。

大马的燃油价格是本区域最低的其中一个国家，预料今年的燃油津贴将达到560亿令吉。

阿都拉：穷国承担物价压力另一方面，首相阿都拉今日在吉隆坡为亚太第22届圆桌会议发表主题演讲时，促请国际社会采取果敢的行动，克服食物、燃油和商品的价格高涨问题。

他指出，物价高涨的大部分负担，皆由发展中国家和贫穷国家所承受，如果没有受到控制将会影响发达国家。“世界上许多国家包括本区域在内，因为粮食问题爆发各种示威、抗议和暴动。”“但是发达国家却丝毫没有那么担心，除了燃油价格的问题之外。”

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