THE government will, for the next few months, have its hands full, so to speak. With fuel subsidy rationalisation moving to the next phase, those involved in the move in the Finance and Domestic Trade, Cooperatives and Consumerism Ministries are bound to be going home every day with violent migraines that inspire visions of them taking their own heads off.
Deputy Finance Minister Datuk Ahmad Maslan had said, on Thursday, that people in the high-income bracket would, from June next year, have to pay market price at the pumps for RON95 petrol.
The mechanism has yet to be finalised, but would entail the use of either MyKad or other cards, like a fleet card, for instance.
The move is to ensure that subsidies are received by only targeted groups, so the low- and middle-income groups will continue to pay subsidised RON95 prices at the pump.
The thinking here is this: the card can be used to verify the income status of the holder.
In doing so — and here, one can only guess the likely scenario — the pump will automatically be set to the price corresponding to the income status of the card holder.
Understandably, there are a number of concerns here, not least of which is how the system would work.
Will the income status used to determine the price a person has to pay be based on personal income or household income? This is important.
Let’s say, Mr and Mrs Lee (let’s not give them any children or this could get complicated) are a single income family, but Mr Lee earns an extremely high amount.
If the mechanism is based on personal income, then Mrs Lee would be entitled to subsidised fuel for her car (even if it is a Porsche). And that’s just one problem. Mr Lee could always use his wife’s card to fill up his own Hummer H3.
Let’s say, the mechanism is, instead, based on household income. And, let’s give Mr and Mrs Lee several children, all of whom are in college, and salaries that put them just inside the high-income tax bracket.
That high income may not be enough for them to afford paying market prices for fuel, feeding a household and paying for their children’s education, all at the same time.
Then, there is the possibility of people in the high-income bracket paying those from the middle- or low-income categories to fill up for them. Let’s face it, if people can save RM20 each time they fill up, they would gladly give RM5 to someone for the use of the latter’s card.
Then, there are the computers that will be used to control all this calculating of prices. If it’s a computer, it can probably be hacked.
This may seem a little far-fetched, but hackers can get into whatever card is being used to change the information held in it to allow the card holder to get fuel at subsidised prices.
Perhaps, a slightly less unlikely scenario may be that unscrupulous petrol station operators (are there any out there? Hmmmm?) hack their own machines to dispense RON95 at subsidised prices to customers who pay a little extra to them.
These are some of the ways people may abuse the system. There are probably a number of other ways.
To cut the amount of abuse, there needs to be constant enforcement by government officers.
And, let’s face it, there will be abuse; there is no way to completely stop it.
So yes, the people involved in the process really do have a lot to think about before the mechanism can be implemented.
Which is why it seems a little odd that the deadline for implementation has already been announced.
The New Straits Times quoted Domestic Trade, Cooperatives and Consumerism Ministry secretary-general Datuk Seri Alias Ahmad as saying the government had received 77 applications to develop mechanisms for the sale of RON95 petrol.
He had said the companies that applied had been given 21 days, since Oct 15, to develop the system, after which the government would select the best. Once this is done, four months will be allocated for testing the system.
What happens if the selected system comes up bust in those four months? Obviously, the deadline will have to be pushed back.
What should have been done, perhaps, was to get the tender process for the system done and get the winning mechanism tested before any sort of deadline was set.
In the meantime, make your announcements that such a system would be implemented as soon as the testing phase had been completed satisfactorily. This would include making sure the system was foolproof, or as close to foolproof as it could possibly be.
This move to save money through subsidy rationalisation, after all, is beneficial to the country, not to mention, necessary. It deserves a well-thought-out mechanism to ensure its success.