Two-tier pricing better than cash aid for RON95 subsidy, say economists

Free Malaysia Today

Economist Tan Peck Leong says the system ensures that only eligible individuals enjoy the subsidy while minimising financial leakage to higher-income groups.   Read More:  https://www.freemalaysiatoday.com/category/nation/2025/03/21/two-tier-pricing-better-than-cash-aid-for-ron95-subsidy-say-economists/   Laporan Lanjut:  https://www.freemalaysiatoday.com/category/bahasa/tempatan/2025/03/21/subsidi-ron95-harga-dua-peringkat-lebih-baik-berbanding-bantuan-tunai-kata-ahli-ekonomi/   Free Malaysia Today is an independent, bi-lingual news portal with a focus on Malaysian current affairs.    Subscribe to our channel - http://bit.ly/2Qo08ry   ------------------------------------------------------------------------------------------------------------------------------------------------------  Check us out at https://www.freemalaysiatoday.com  Follow FMT on Facebook: https://bit.ly/49JJoo5  Follow FMT on Dailymotion: https://bit.ly/2WGITHM  Follow FMT on X: https://bit.ly/48zARSW  Follow FMT on Instagram: https://bit.ly/48Cq76h  Follow FMT on TikTok : https://bit.ly/3uKuQFp  Follow FMT Berita on TikTok: https://bit.ly/48vpnQG  Follow FMT Telegram - https://bit.ly/42VyzMX  Follow FMT LinkedIn - https://bit.ly/42YytEb  Follow FMT Lifestyle on Instagram: https://bit.ly/42WrsUj  Follow FMT on WhatsApp: https://bit.ly/49GMbxW  ------------------------------------------------------------------------------------------------------------------------------------------------------  Download FMT News App:  Google Play – http://bit.ly/2YSuV46  App Store – https://apple.co/2HNH7gZ  Huawei AppGallery - https://bit.ly/2D2OpNP   #FMTNews #Subsidy #Petrol #RON95

Transcript

00:00Economists have voiced their support for the two-tier pricing mechanism for the RON95 petrol

00:07subsidy, saying it trumps providing people with cash assistance.

00:12University Technology Mara's Tan Peck Leong said the system ensures that only eligible

00:17individuals will receive subsidized fuel, reducing financial leakage to higher-income

00:22groups.

00:23He also said using MyCard or eWallet verification to support the two-tiered pricing model will

00:29help streamline subsidy distribution, reduce fraud, and enable the government to introduce

00:34a subsidy cap for better expenditure control.

00:38Economist Jeffrey Williams said tiered pricing is by far the best approach for targeted RON95

00:44subsidies as it would allow small volumes to be subsidized while larger volumes remain

00:48unsubsidized, which has worked well for electricity subsidies.

00:53Williams also argued that a tiered system is better for managing inflation if introduced

00:58gradually.

00:59However, he opposed the use of MyCard or eWallets, warning that vouchers could be cloned or traded

01:05in the black market.

01:07Last year, Economy Minister Rafizieh Ramli told the Dewan Rakyat that the government

01:11would implement a two-tier pricing system for the targeted RON95 subsidy as it poses

01:17a lower risk of inflationary impact compared with the cash transfer method.

01:23Natasha Biest, FMT.

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