Is Malaysia getting a fuel subsidy in 2024? Stay tuned for Malaysia’s RON95 petrol & diesel subsidy update after the launch of PADU here!
When will the fuel subsidy (RON95 petrol & diesel) be launched in Malaysia?
After the introduction of the central database system known as PADU in January 2024, targeted subsidies for gasoline and diesel are probably going to be implemented soon, Economy Minister Mohd Rafizi Ramli stated in the Dewan Rakyat earlier this month. The exact date is yet to be determined, but the Malaysian government will launch the targeted RON95 subsidy program in the second half of 2024 (H2 2024) in order to direct our resources as efficiently as possible to those who need them most.
According to Rafizi, a nation where 53% of the fuel subsidies go to individuals in the top 20 (T20) income group is not an equitable nor sustainable model.
How many percent will the RON95 petrol & diesel subsidy be?
According to the Economy Minister, switching to a targeted system is anticipated to reduce petroleum and diesel subsidy expenditure by 17.5 percent in the year of 2024.
Given what we’ve seen in other nations, analysts must be wondering why it takes so long.
Getting everything ready is crucial for the sequencing. In his opening remarks at the National Economic Outlook Conference, which was hosted by the Malaysian Institute of Economic Research (MIER) on Monday, Rafizi stated, “Once we roll it out, it is expected that there will be unhappiness here and there, along with teething problems, but we can’t afford the U-turn.”.
Three mechanisms will be used to implement the program: the net disposable income of the individual, the net disposable income of the household through social protection or assistance schemes, and a combination of household and individual earnings that will be implemented through the use of a subsidy card.
These initiatives are consistent with the government’s primary goal of expanding the fiscal framework within which it operates. We have to find new ways to mobilize our resources and cut down on waste in the system because our public finances ran a fiscal deficit of more than 5 percent for three years in a row. Increasing tax collection is one unavoidable aspect of addressing our insufficient revenue. A dynamic, sustainable state is never achieved by spending more money than we have, according to Rafizi.
What is Malaysia PADU?
Are You Ready for the 2024 Subsidy Program? This targeted petrol subsidy program is anticipated to be rolled out gradually beginning in January following the public launch of Pangkalan Data Utama (PADU). For now, the restructuring of petrol subsidies will be rolled out in Peninsular Malaysia first.
In conclusion, the government can make sure that with this new targeted petrol subsidy mechanism, people who actually need the subsidies will receive them by implementing the PADU system. This initiative, which aims to close the economic gap between low- and high-income groups, is also perceived as an attempt by the government to maintain equity in the distribution of income.
When will the Malaysia PADU petrol & diesel subsidy program launched?
Registration for the Padu national database is open as of 2 January 2024 and will be used for targeted subsidies. Register HERE.
The Ministry of Domestic Trade and Costs of Living (KPDN) announced via its X (previously Twitter) page that user registration for the nation’s central database hub (PADU) will begin on January 2 2024.
Registrations will be accepted for use in targeted subsidies. It is recommended that all Malaysians who are eighteen years of age or older visit the Padu portal in order to view their profile and update or verify their personal data. A Padu profile will contain 39 distinct pieces of personal data in total.
In the event that an individual does not possess the necessary devices for online registration, they can still register manually in person at places like government agency offices, local district offices, and Digital Economy Centres (PEDi).
The ministry states that while registration is not mandatory, it is encouraged in order to make sure that Malaysians who qualify for aid—such as targeted subsidies—are not left out or overlooked.
With the system’s launch, every household in the nation will have access to a national database of socioeconomic data, which will be updated in “near real-time” and regularly analyzed.
The goal of Padu’s development is to enable targeted policy implementation while facilitating data-driven policymaking and decision-making. The national digital identification system of the nation, MyDigital ID, will eventually be integrated with the system, which has been under development since June 2023.
How Malaysia’s 2024 Petrol Subsidy Will Operate?
Earlier in November, Malaysia’s Minister of Economics declared that a new targeted petrol subsidy mechanism would be introduced beginning in 2024. Three options were presented during a Q&A session in the parliament, according to a report from Berita Harian, for how the petrol and diesel subsidy restructuring will be implemented beginning in the year 2024.
The following outlines the three categories in which the new targeted petrol subsidy for 2024 operates:
– Individual Net Income:
Also called Net Personal Income – This is the amount left over after income taxes and statutory deductions like EPF and SOCSO. Remember that this does not include any deductions from any outstanding insurance or loan balances. This approach guarantees the government’s equitable provision of fuel subsidies in Malaysia. The reasoning behind this is quite straightforward: people with lower incomes might receive more subsidies, while people with higher incomes might receive less.
– Household Net Income:
After your statutory deductions, the net income of every household member will be taken into account by this second mechanic. This covers all financial, social, and welfare assistance, as well as your income from your current employment.
– Combined Household Net Income:
The third mechanism combines household and individual income. Using financial assistance subsidy cards is part of this mechanism.
Utilizing subsidy cards, which give those in need financial support, is part of this mechanism. This will create a balanced system that allows for more targeted attention to the needs of households and individuals.
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