According to the Finance Minister, government subsidies for RON95 petrol amount to RM27 billion, of which 22% or RM6 billion goes to the B40 low income group and the rest to the M40 and T20 groups.
The M40 middle income group receives 46% of the petrol subsidy or RM13 billion, while the T20 receives 32% or RM8 billion.
He said that the RM8 billion petrol subsidy for the T20 high income group was comparable to the BKM allocation. If government used the RM8 billion petrol subsidy for infrastructure, it could build 16 hospitals with 300 beds, or 160 schools with 30 classrooms.
Government is exploring the implementation of a targeted petrol subsidy mechanism that would allow the lower and middle income groups to continue to enjoy the petrol subsidy, while the higher income groups would have to pay more to buy petrol.
Currently government subsidises RON95 petrol at over RM2.00 per litre and without the government subsidy, RON95 petrol would cost over RM4.00 per litre.
