A cross-sectional survey measuring effectiveness of fuel subsidy restructure in Malaysia

Abstract

Background: Out of the MYR 14 billion of fuel subsidy, the top 20% households (T20) in the country enjoy MYR 8 billion compared to MYR 6 billion of the fuel subsidy restructure enjoyed by the low income (B40) households. As the Malaysian government has started to restructure the fuel subsidy scheme in December 2022 when the national economy began to recover post coronavirus 2019 (COVID-19) pandemic, this study is in need as it highlights the key concerns of B40 and middle 40% (M40) households to the government. This research aims to determine key factors affecting fuel subsidy restructure effectiveness from the perspective of B40 and M40 households in Malaysia post COVID-19 pandemic. Methods: A total of 150 questionnaires were disseminated to Malaysia B40 and M40 households. The questionnaire was completed by 105 households with no missing value. This paper utilized cross-sectional design to examine factors that contribute to fuel subsidy restructure in Malaysia post COVID-19 pandemic. Results: Efficient targeting and social protection were the most important factor that contribute to the effectiveness of fuel subsidy restructure in Malaysia. Conclusions: This research serves as the pioneer research to provide valuable insights to the Malaysian government to effectively restructure fuel subsidy initiative towards creating greater social protection, efficient targeting and better governance and administrative capacity in improving the quality of life of the B40 and M40 households.