(Source: paultan.org)
- Due to relatively low global crude oil prices, starting 1st December 2014, the Government saw that there was no more significant benefit of subsidizing fuel price for motorists. However, as oil global crude oil prices is actually volatile, it was unclear whether fuel price subsidy will be discontinued for good or will be reinstated back when the global crude oil prices rise again in the future.
Hasan Malek: No more RON95 petrol, diesel subsidies from Dec 1 (21 November 2014)
- Before that announcement, when the Government was still giving fuel price subsidy, the Government also has announced about three tiers of fuel price subsidy recipients. However, how actually the fuel price subsidy mechanism is going to be implemented was unclear as well.
Petrol subsidy rationalisation system using MyKad being studied, says Ahmad Maslan (23 October 2014)
Full fuel subsidy only for those earning under RM5,000 monthly (27 October 2014)
Najib: New RON95 petrol subsidy scheme to take effect mid-2015, diesel earlier (30 October 2014)
Following those announcements, some oil companies in Malaysia such as Caltex have taken pro-active measure to inform their customers, but I believe they are also in the dark about the actual mechanism.
- The proposal of a computer system to manage fuel price subsidy given to the motorists has been around for quite some time since 2008.
ePetrol: Possible Fuel Subsidy Control Mechanism? (21 May 2008)
ePetrol for Fuel Subsidy Management? (22 November 2009)
- The proposed system probably will utilize MyKad and link-up with Inland Revenue Board (IRB) for recipients’ identification and fuel subsidy quota. However, I hope the Government will not opt for such system as experience proved that it will burden the Government and the people more than it should assist.
- Possible repercussions are:
- Linkup mechanism with IRB
- The link-up mechanism with (possibly) IRB to obtain income and monthly quota data is still unclear whether will be verified before every fuelling transaction (data on IRB server) or will be uploaded annually onto MyKad (data in MyKad chip).
- If the data is going to be verified before every fuelling transaction (such as credit card approval):
- Time for fuelling will be longer as verification time is dependent on the Internet connection and IRB server.
- IRB database will keep the monthly quota balance.
- If data is uploaded onto MyKad annually at IRB offices possibly after income tax declaration:
- The month of May will be the peak month to upload income data because most of us usually will declare our income tax during April. Those previously did not declare because their income are below threshold now have to declare as well if they want to receive fuel subsidy.
- The monthly quota (whether in litre or RM) will be written and updated onto MyKad.
- Confirmation with National Registration Department (NRD) whether got space to write income and monthly quota data.
- Either option will have their own complexity.
- MyKad reader/writer
- If the data is going to be verified before every fuelling transaction:
- Every petrol station even at the rural and remote areas have to obtain MyKad reader as current card reader (credit card and loyalty card) might not be compatible to read MyKad.
- For example currently, Caltex user can only use credit card at the pump but have to update B-Card (loyalty card) at the counter. Compared to Petronas where credit card and Mesra card can be used at the kiosk.
- If data is uploaded onto MyKad annually:
- In addition to the same complexity as above, as write on MyKad is very different from read, a costlier MyKad reader and writer must be used by every fuel station to update monthly quota.
- MyKad chip
- There are many MyKad with damaged chip due to various reasons. NRD which has no involvement in the system will be burdened by MyKad replacement although the physical card still intact. Probably NRD also will be asked to upload income and monthly quota data after every replacement.
- The cost of MyKad is quite expensive about RM30 mainly contributed by the chip cost.
- IRB also will be burdened with customers’ ire when the chip is damaged when using MyKad at fuel station or uploading data onto MyKad.
- Internet connection
- If the Government opt for income data going to be verified before every fuelling transaction, the Internet connection especially at rural fuel stations have to be upgraded. There will be chaos if consumer cannot get their fuel subsidy when fuelling.
- Therefore due to its complexity, ePetrol is not a good system and the Government should not implement it. If the need come to give fuel price subsidy, the Government can easily distribute petrol voucher such as 1Malaysia Book Voucher or credit sum of money directly into eligible person bank accounts such as BR1M. Using IT may sound bombastic but it is not worth it for simple things.
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