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The most stupid policy in this world is subsidizing fuel with public fund

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Malaysian taxpayers have to bear for at least RM7.0 billion subsidy leakages to the diesel and petrol smuggling to foreign countries in a year according to Maybank research unit. Besides, the International Monetary Fuud (IMF) meanwhile also estimates that 80% of fuel subsidy is enjoyed by the top 40% high-income group.

Although with a total RM24.8 billion is budgeted for fuel subsidy in 2014, but only RM3.5 billion fuel subsidy is projected to benefit low income people after taking into account the leakages in fuel smuggling.

In reality only 14.1% of fuel subsidy is benefiting low income group, 28.2% subsidy is lost to smuggling and remaining 57.7% subsidy is enjoyed by 40% high income group who have more and bigger capacity vehicles.

The proposed fuel multi-tier pricing for targeted group system with MyCard is not going to work out in Malaysia because of the lax enforcement and smart consumers who will exploit the system. There is also the administration hassle of implementing the new system.

We do not need to hire foreign management consultants to devise an effective and easy fuel rationalization program. All the BN government requires is the strong political […]