Should the rich pay more for their petrol? This question has been on everyone’s lips and minds since Malaysian prime minister Datuk Seri Anwar Ibrahim announced recently that the government is mulling taking away the ability to buy subsidised RON 95 petrol from higher-income Malaysians amidst the ongoing global fuel crisis, which has resulted in subsidy spending ballooning to RM5 billion a month. Well, Puchong MP Yeo Bee Yin has spoken out in a statement against locking out T15 and T20 income groups from Budi95 petrol, saying this could lead to inflation and economic slowdown, according to reports by the Malay Mail and Free Malaysia Today. “Fuel price hikes are never contained within a single demographic; they ripple through the entire supply chain,” she said, adding that since many T15 and T20 earners are small business owners, service providers and employees, higher transport and operational costs could be passed down to consumers at large. “This creates a secondary wave of inflation for essential goods and services, ultimately hurting other lower-income groups,” she said. Yeo also pointed out that the T15 and T20 groups are key drivers of domestic private consumption, and higher fuel costs could dampen demand in retail, hospitality and services sectors. The combined impact of inflation and weaker domestic consumption could worsen an already fragile economic outlook amidst global uncertainties, including tensions in West Asia, she said. “Putrajaya must answer this: is there truly a net positive impact on the economy when the government uses one hand to remove subsidies – effectively increasing inflation and reducing demand – and the other to cushion it through a supplementary budget?” she said. Subsidy rationalisation, she added, must be carefully managed to avoid unintended macroeconomic consequences, and the government must consider the broader fiscal impact, including potential stimulus spending required to offset economic slowdown. “The worst time to remove any subsidy is in the middle of a crisis when an expansionary fiscal policy – not a contractionary one – is required to sustain the economy,” she said. Even if subsidy removal proceeds, she questioned how eligibility would be determined fairly beyond just gross household income. On this, Yeo said a household earning RM13,000 may live comfortably in rural areas but struggle in the Klang Valley when factoring in housing, childcare, education and elderly care. She also said that if T15 is taken to be the cut-off, nearly a third of Selangor and Kuala Lumpur households, plus 40% of Putrajaya households, could be affected. “This policy risks further squeezing the urban middle class, many of whom are already struggling to keep up with the high cost of living. “Putrajaya must prove with data that this move will not trigger an inflationary spiral or a net economic loss before asking the people to bear this burden. Fiscal reform should not become a code word for squeezing the urban middle class to their breaking point,” she said. For all these reasons, the Puchong MP said removing fuel subsidies should not be rushed, and that any implementation system, be it ID verification or tiered pricing, could lead to petrol station congestion and create opportunities for a grey market and corruption. Looking to sell your car? Sell it with Carro. Compare prices between different insurer providers to save the most on your car insurance renewal compared to other competing services. Many payment method supported and you can pay with instalment using Atome, Grab PayLater or Shopee SPayLater. Use the promo code 'PAULTAN' when you checkout for 10% discount!