Lower-income groups are expected to receive targeted petrol subsidies via a direct paying system rather than through a subsidy card.

Quoting sources, The Malaysian Insight today said that the Finance Ministry has agreed to the move pending cabinet approval.

This is despite vendors for the rejected subsidy card system already being appointed, who will now work with the new system instead.

The proposal is slated to be presented at next week's cabinet meeting for approval. If greenlit, implementation is expected to take effect at the end of July.

Under the scheme, recipients are required to open a remittance account to receive the subsidy after they have paid for petrol at regular prices, according to TMI.

The sources were also quoted as saying that the Domestic Trade and Consumer Affairs Ministry and industry players preferred the direct paying system over subsidy cards.

Report being finalised for Cabinet

Officials in the two ministries are now finalising the report for the cabinet, reported TMI.

In April, Domestic Trade and Consumer Affairs Minister Saifuddin Nasution Ismail told Parliament that Putrajaya was deciding between two methods of implementing the fuel subsidy.

Saifuddin also said the government was building a special database for the subsidies, different from the one utilised for the Cost of Living Aid (BSH) programme.

In Budget 2019, RM2 billion was to be allocated for the government to implement the targeted fuel subsidies in the second half of the year.

The planned subsidies are intended to replace the controlled petrol price currently in place, which is a blanket subsidy.

Owners of cars under 1,500cc and motorcycles under 125cc are entitled to the 30 sen a litre subsidy.