Fuel Subsidy - A proposal

We got 3  types of mainly used fuel: NGV, Petrol and diesel.

I would not worry about the NGV and Petrol, since from what I have read, it is mostly used by Malaysians, and I think only small amount of it were used by foreigners or being smuggled out.

Prevent Fuel Smugglings - Color marker

The biggest problem would be the trade of the subsidized  fuel. Certain aspect could be used. For instance we could implement the use of color marker as being implemented in the US. We could use red diesel for fishermen, and orange diesel for normal road transport. The colored diesel will also leave traces on the vehicle engine and would only disappear after one or two weeks of usage of non-colored diesel. AFAIK, it will not effect the performance and health of the engines. The color also cannot be easily removed or filtered. This would also ease enforcement, as anybody could detect the subsidized fuel, and make the necessary police report. I don't know about the currently used "nano" technology in diesel used by the relevant authorities, but I understood that the fuel need to be sent to a lab to detect the nano marker.

 

Anyway, anybody caught with these colored diesel SHOULD  be severely penalized and their vehicle confiscated. Enforcement could be eased further if the informer are to be handsomely rewarded.

This approach could also be used for petrol fuels. For example, a green marker for all subsidized petrol, or rotten egg smell for NGVs.

Distribution of Subsidy,

One method that I had heard was to use MyKad. Some arguments were posted in paultan's blog 

I have these question however:

1. Could stolen MyKad be blacklisted, and how long does it take to blacklist a MyKad?

2. Does it using  MEPS Cash, and would it require everybody to have a bank account, or guaranteed to have a bank account? Some people do not have any bank account.

3. How could we prevent a boss with a 7-series from ordering their driver to use the drivers MyKad to fuel the car.

4. How about company car/lorry. Does they need to use the driver's MyKad or do they issue another card?

I see the the use of MyKad is just a marketing gimmick, and trying to capitalize on the problem.

Since MyKad transaction would be link to a bank,  and the user would probably need a bank account to ensure that they have the subsidy, the MyKad could be easily replaced by the any local bank ATM card or MEPS cash. 

Anyway, 

I have thought of  2 proposed implementation on the subsidy  (I might came out with new idea later) :

Solution A.  

Abolish all subsidy (or give limited subsidy) in all fuels except NGV.

Give subsidy or tax break for installing NGV equipment in vehicles.

Ensure that ALL petrol stations (not exclusively Petronas) also have NGV  fueling points. - govt might want to subsidize the equipment needed for NGV fueling in the petrol stations. 

AND that NGV is available all over the country.

For fishermen, we could implement the color marker as above.

Solution B

Still abolish all subsidy (or give limited subsidy) in all fuels except NGV.

Give a tax rebate to all citizens. This way everybody will be tempted to return their tax forms, or register if they have not.

Any company must declare their list of uses/rented vehicles.

Transportation company's tax rebate  would be separately calculated, probably based on trips/mileage or turnover, with a capped maximum rebate, of course!.

 

All citizens would be given fixed amount of rebate. say RM 1200 per year. However. any purchases using MEPS or credit card could be claimed up to a maximum rebate, say 2400 per year. We could calculate that the rebate claimable would be 20% of the total fuel purchase. 

Fishermen's  subsidy would be treated differently. for example, the proposed yearly rebate could be spread into monthly rebate. It could be controlled by the local fishermen association, or by the relevant authorities.

This way everybody will get some rebate (bonus) at the end of the year, regardless of their fuel usage if (and only if) they return their tax form. Hence this would motivate even poor people at remote villages to submit their tax forms. This would be killing two birds with one stone.

How would they spent the money (on fuel or otherwise) would be up to them. We don't have to think whether they will spent it on fuel or not. Its their money. 

However, to please the control freak who want to dictate everything , we could also give the rebate in terms of  fuel coupon, or similar methods.

Anyway, enforcement need to be enhanced to ensure that the subsidized fuel did not fall into wrong hands.

my 2 sen.