• The Finance Ministry has proposed a RON95 petrol subsidy plan.

• It covers motorcycles below 125cc and cars below 1500cc.

• Eligible motorcycle owners get 40 litres and car owners 100 litres of subsidized fuel, respectively.

The government through the Finance Ministry has proposed a new petrol subsidy system. The plan applies to RON95 petrol only for motorcycles below 125cc and cars below 1500cc.

The Finance Minister, YB Lim Guan Eng made the announcement when he tabled the 2019 Budget in Parliament earlier today.

He also revealed that the move will cost RM 2 billion, covering some 4 million car owners and 2.6 million motorcycle owners. The subsidy will allow for a maximum of 40 litres for eligible motorcycle owners, and 100 litres for car owners.

No mechanism has yet been revealed on how the plan will be implemented. However, we expect the Road Transport Department (JPJ) to contact those eligible. They will then be provided with a subsidy card.

We will leave it to your opinion whether the announcement is good news or otherwise. In our opinion, the proposed plan should benefit motorcycle owners who are not well-to-do. It means those who have the means will support the less fortunate. The current blanket subsidy system benefits everyone, by contrast. That explains why the government suggested motorcycles below 125cc, instead of for example, below 250cc.

The announcement is currently a proposal, as the budget needs to be approved by the majority in Parliament. Let us see how it turns out should the proposal make it through.