Convert petrol subsidy programme to aid for B20, says economist

Economist Barjoyai Bardai says those in the B20 group would not have benefited as much from the petrol subsidy programme as they are more reliant on public transport.

PETALING JAYA: An economist has proposed that the government convert the petrol subsidy programme (PSP), which it yesterday decided against implementing, to an initiative to help those in the B20 group.

Universiti Tun Abdul Razak’s Barjoyai Bardai said the allocation set aside for the PSP could be used to provide subsidies for food, medicine, homes and education for the B20.

“The subsidies could be in the form of food vouchers or aid for schooling or even rent, which would be a more effective targeted subsidy compared to a petrol subsidy,” he told FMT.

He added that the B20 were more dependent on public transport and did not use as much petrol as others.

Yesterday, Deputy Domestic Trade and Consumer Affairs Minister Rosol Wahid told the Dewan Rakyat that his ministry along with the finance ministry had decided not to implement the programme.

The PSP was a targeted fuel subsidy initiative for the B40 and M40 groups. It was announced by the Pakatan Harapan government in October but its implementation was delayed. It was slated to take effect from Jan 1 this year.

It would have applied to the recipients of Cost of Living Aid (BSH), those with motorcycles with engines under 150cc and cars with engines under 1,600cc, or motorcycles over seven years old and cars over 10.

The subsidies were to be credited to eligible recipients every four months.

Barjoyai said the PSP would have been difficult to implement as petrol subsidies benefited everyone under the current system.

However, he said Putrajaya must come up with an initiative to help the B20 and B40 if petrol prices increase.

“The BSH can be increased although in the long run, it cannot be continued as it will have a negative impact on the economy in the long run.”