Will vehicle type effectively target RON95 subsidies for the B60 group?

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Vehicle Type May Not Effectively Target RON95 Subsidies for the B60 Group

Economy Minister Rafizi Ramli has indicated that using vehicle types to determine eligibility for RON95 fuel subsidies may not be an effective strategy for reaching the B60 low-income group. This approach could inadvertently exclude a significant portion of these families, as many do not possess registered vehicles. The Padu database has revealed that approximately 40% of B60 families do not have any registered vehicles under their names.
Challenges with Vehicle Registration Data

The Padu database, which has matched vehicle ownership with all vehicle registrations at the Road Transport Department (JPJ), highlights a critical issue: a substantial percentage of B60 families lack registered vehicles. This means that any subsidy targeting mechanism based solely on vehicle registration would likely fail to include many of the intended recipients within this income bracket. The minister pointed out that it is common for a family to share a motorcycle, which might be registered under a different individual's name.
Precedents from Diesel Subsidy Rationalisation

Similar challenges were encountered during the implementation of the diesel subsidy rationalisation programme. Rafizi noted that a significant mismatch occurred because vehicles were frequently registered under names other than the actual users. This practice, where parents might purchase vehicles for their children or individuals use another person's name for registration, creates a risk of excluding many lower-income households from receiving targeted subsidies.
Risk of Excluding Low-Income Families

The primary concern with using vehicle type or registration as a basis for RON95 subsidy targeting is the increased risk of exclusion for families in the B60 group. This income segment, by its nature, often involves more complex household arrangements and resource sharing, including transportation. Relying on formal vehicle ownership records could therefore lead to a failure in distributing subsidies equitably to those most in need, despite their lower income status.

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Will vehicle type effectively target RON95 subsidies for the B60 group?

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