KUCHING: Charging non-citizens market price for RON95 petrol—even if they drive Malaysian-registered vehicles—could help curb subsidy leakage, though enforcement challenges remain, said Dr Nivakan Sritharan of Swinburne University of Technology Sarawak.
He noted that the proposed two-tier pricing model—RM1.99 per litre for citizens, and floating rates for foreigners—is a step toward more targeted subsidies.
“This move promotes more equitable pricing, which could reduce overconsumption and wastage, especially among high-income groups,” he told Sarawak Tribune. “It could also help prevent cross-border smuggling and illegal resale.”
With fuel subsidies for RON95 amounting to about RM20 billion annually, Nivakan said rationalisation could redirect billions toward priority sectors like welfare, infrastructure, and education.
However, he warned of implementation hurdles.
“The biggest challenge lies in enforcement. Differentiating citizens from non-citizens at petrol stations could cause bottlenecks without a strong digital infrastructure. Weak oversight may also lead to black markets or subsidised fuel being resold illegally,” he said.
On the one-off RM100 Sumbangan Asas Rahmah (SARA) cash aid, Nivakan said the initiative offers immediate relief and is Malaysia’s first universal cash transfer, reaching an estimated 22 million adults.
“With RM2 billion allocated, it helps cushion short-term living costs, offset inflation in food and essentials, and stimulate consumer spending at over 4,100 retail outlets,” he said.
If kept temporary and refined in future phases, the payout poses minimal risk to fiscal discipline, he added. “Unspent funds will be redistributed to vulnerable groups next year, reinforcing the policy’s redistributive goals.”
Still, he cautioned the RM100 aid is too modest to address longer-term issues like housing, transport, and healthcare.
Nivakan also commented on the Jualan Rahmah MADANI programme, which has been expanded nationwide to all 600 parliamentary constituencies. He said this would help improve access to affordable goods for low-income households and reduce nutritional stress in the short term.
“However, if private retailers are undercut or local producers face unfair price competition, there may be long-term market distortions,” he warned.
Looking further ahead, he praised grassroots-driven initiatives such as Sejahtera MADANI, Kampung Angkat MADANI, and Sekolah Angkat MADANI, which aim to empower communities and foster bottom-up development.
“These programmes build local capacity and encourage ownership of economic and social outcomes,” Nivakan said.
He highlighted the RM100,000 community grants under Sejahtera MADANI as a promising tool for supporting microenterprises and rural innovation—especially when combined with technical training and infrastructure support.
Similarly, he said Sekolah Angkat MADANI could help narrow the education gap and strengthen human capital in underserved regions.
“For these efforts to be sustainable, the government must ensure transparent disbursement, rigorous impact monitoring, and policy continuity across administrations,” he stressed.
“Without long-term funding models, many of these local initiatives risk stalling after their initial phase,” he added.
