PETALING JAYA: Using the MyKad at petrol stations to enjoy the RON95 subsidy will have issues and is not feasible, says the Petrol Dealers Association of Malaysia (PDAM).
Its communication and media secretary Gordon Lim said petrol station operators may face several challenges if subsidised RON95 petrol is sold using MyKad.
He proposed the price of RON95 be floated and the current subsidised diesel control system (SKDS), which was implemented effectively in June, be adopted.
He said the biggest setback of a two-tiered pricing mechanism is that it can affect the smooth operations of petrol stations due to customers queuing up at counters to get the approval to buy subsidised petrol.
“For cash purchases, customers will need to queue inside the store as ‘pigeonhole’ transactions from outside may not be possible. Due to the queue, a petrol station may also lose customers who intend to shop at their convenience store.
“More customers may opt to pay electronically with their debit or credit cards. This will incur a higher merchant discount rate for us,” he added.
Lim said operators would also be burdened by an increase in capital due to the price increase as reimbursement for the subsidy could be delayed by the government.
He added that a two-tiered pricing system may also put smaller petrol stations out of business as motorists may opt to buy fuel from bigger stations to avoid long queues.
He also said PDAM foresees people abusing petrol subsidies by swapping their MyKad with eligible individuals or having them fill petrol for the vehicles of those who are ineligible.
Universiti Sains Malaysia Centre for Policy Research and International Studies director Assoc Prof Dr Azeem Fazwan Ahmad Farouk agreed that two-tiered fuel pricing for RON95 petrol is impractical as using the MyKad could complicate a sale.
“Subsidising fuel encourages overconsumption and smuggling. This has been evident time and again. What should be done is to float the price of RON95 and subsidise the individual by returning cash to those who qualify.
“This is the best solution,” he said.
Economist Dr Mohd Afzanizam Abdul Rashid said the two-tiered pricing system would incur additional costs for petrol station operators as they may need to enhance their infrastructure, especially those in rural areas where telecommunications coverage could be poor.
“If there is no cap on each eligible recipient for subsidised RON95, it can be abused when ineligible parties buy fuel through them. However, putting a cap on the entitled quantity can be cumbersome as consumption may vary from one to another. Some may need to travel long distances to commute to work.
“It is best to allow the RON95 petrol price to be floated and then reimburse the middle- and low-income motorists with direct cash transfers,” said the chief economist at Bank Muamalat.
Malaysia Consumers Movement secretary-general Herby Dhillon suggested subsidies be directly paid to the bank accounts of eligible recipients based on the type and number of vehicles they own and their average usage.
“This is the only way to avoid leakages, and vehicle ownership data can be obtained from the Road Transport Department and Inland Revenue Board.
“The subsidies can be paid monthly and the authorities can periodically investigate at random if there is suspicion of abuse,” he added.
