KUALA LUMPUR – Petrol dealers have outlined recommendations for targeted fuel mechanisms to alleviate their burden following International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali’s announcement that the government is working on a suitable structure to cut blanket fuel subsidies.
Speaking to The Vibes, Petroleum Dealers’ Association of Malaysia (PDAM) president Datuk Khairul Annuar Abdul Aziz said that the best way to implement the move would be to credit subsidies directly to bank accounts or a special subsidy wallet.
“The government should also ensure that petrol retailers do not need to wait for a reimbursement of subsidies as our rolling capital might be impacted,” he said.
He added that purchases should be maintained as per normal, without undue conditions, to avoid creating unnecessary queues at gas station pumps.
Stressing that PDAM has not been contacted by the authorities regarding the issue, he urged the government to hold discussions with industry stakeholders as soon as possible.
He said that discourse on the targeted subsidies mechanism must be conducted to ensure the survival of the petrol retail industry and an unhindered supply of fuel to the public.
Besides that, he said that while PDAM is generally supportive of the move to provide fuel subsidies for lower-income communities, the group is also wary of potential negative impacts on the economy and petrol distributors.
“Inflation might occur due to an increase in fuel prices, hence the government must ensure that inflation is kept to a minimum,” he said, adding that fuel price hikes have the potential of causing more problems than when prices are low.
Last weekend, Azmin said that the government is likely to introduce a directed fuel mechanism to cushion the impact of the rising crude oil prices, especially for the lower-income group.
This follows the sharp jump in the projected fuel subsidy cost this year to RM28 billion compared to RM11 billion last year. – The Vibes, May 24, 2022
