Yeo said many in the T15 or T20 income groups were business owners, and that any increase in transportation and operational costs was often passed down to consumers.
The Wanita DAP deputy chief said this could create a secondary inflation wave for various goods and services, ultimately to the detriment of Malaysians in lower-income groups.
The former federal minister also expressed fears that removing fuel subsidies for the rich would affect domestic consumption, hampering the national economy.
“The T15 or T20 are a primary engine for domestic private consumption. By sharply increasing their fuel bills, the government risks stifling demand in the retail, hospitality, and service sectors.
“The combination of higher inflation and shrinking domestic consumption will severely worsen an economic outlook already burdened by the ongoing Middle East conflict,” she said in a statement.
Maintaining that she was not against removing fuel subsidies for the rich, she said the bigger matter at hand was timing, given the economic fallout from the global energy crisis.
She also asked what mechanism the government would use to remove fuel subsidies for the rich, whether via MyKads or tiered pricing.
“In my opinion, the worst time to remove any subsidy is in the middle of a crisis when an expansionary fiscal policy – not a contractionary one – is required to sustain the economy.
“The removal of RON95 petrol subsidies has massive structural implications and must not be rushed. Putrajaya must prove with data that this move will not trigger an inflationary spiral or a net economic loss before asking the people to bear this burden.”
On Sunday, Prime Minister Anwar Ibrahim said the government would finalise the proposed review of fuel subsidies for rich Malaysians as soon as possible.
He said this was subject to an ongoing study to determine which specific income groups would be affected so that the initiative does not end up burdening the upper-middle income group.
Anwar, who is also finance minister, said discussions also concerned whether the subsidy should be removed for those who fall under the T5, T10, T15, or T20 groups.
RON95 is currently subsidised at RM1.99 a litre for all Malaysians with a valid driving licence, capped at 200 litres a month. In East Malaysia, subsidised diesel is sold at RM2.15 per litre, compared with RM5.17 a litre in Peninsular Malaysia.