Petrol subsidy: Examine personal expenditure amounts – Expert

SHAH ALAM - The petrol and diesel subsidy retargeting method needs to look at the level of individual expenditure and cannot be determined based on the salary level or average household income alone.

Tun Abdul Razak University Economist Emeritus Professor Dr Barjoyai Bardai said government must increase the Main Database System's (Padu) effectiveness to retarget diesel and fuel subsidies to the B40 or M40 group.

He said that for any qualified person to benefit from the subsidy, how it would be distributed must be done thoroughly, but the people must register through the Padu System.

"All three of the government's recommendations are appropriate and can be emphasised, however the government must consider the individual criteria before they are eligible for subsidies.

"Among the criteria that must be included are income, expenses and also the residential environment to ensure the distribution of subsidies is fairer to the needy.

"If individuals do not register in the system, they are not eligible for subsidies. Therefore, there needs to be a comprehensive implementation regarding this matter," he told Sinar.

On Monday, Economy Minister Rafizi Ramli proposed three methods of targeting petrol and diesel subsidies, which were given according to individual net spending through a social protection approach.

Second, according to household net spending eligibility and through a hybrid approach, a combination of social protection and social assistance, while the third method was implementation using subsidy cards.

Barjoyai pointed out that the implementations were temporary solutions to assist the public and the government should consider a longer-term strategy for economic development.

He said the government must find new ways to boost national income if it wanted to keep providing subsidies to the people.

"Subsidies such as diesel and petrol can be maintained as a short-term plan, but the government needs to find new sources that can inject national income so that these benefits can be channelled to the people," he explained.