MyKad-based RON95 petrol subsidy plan poses data security concerns – identity theft, information misuse

As the Malaysian government considers the use of the e-wallets and the MyKad national identity card as a mechanism for implementing targeted subsidies for RON 95 petrol, data security remains a serious concern, reported The Sun.

Although details and the mechanism of the plan are unclear, worries have arisen regarding the potential risks to privacy and data security through the use of e-wallets and the MyKad, said head of legal and quality at Universiti Teknologi Mara institute of transport Siti Ayu Jalil.

“Consumers face heightened security and fraud risks, such as making payments to unverified merchants, exposure of private details or potential data breaches. Additionally, if a phone is stolen, a thief could gain access to the e-wallet,” Siti Ayu said.

At the tabling of Budget 2025, prime minister Datuk Seri Anwar Ibrahim revealed that the restructuring of RON 95 petrol subsidy to a targeted subsidy will take place in mid-2025, and that the country presently spends RM20 billion a year in petrol subsidies to keep the price of RON 95 capped at RM2.05 per litre, and moving to a targeted subsidy would save the government RM8 billion.

The targeted petrol subsidy was to exclude the top 15% earners in the country, or T15, from receiving RON 95 subsidies, though the prime minister has since walked back on the definition of T15, which was searched by many and found to point at an income of RM12,000 or RM13,000.

The restructuring of RON 95 subsidy is needed because subsidy leakage has seen it benefit groups which are not supposed to enjoy subsidies, second finance minister Datuk Seri Amir Hamzah Azizan said earlier this month. Current data estimates that over 40% of petrol usage is by foreigners, the commercial sector and smuggling, he said.

While targeted subsidies are aimed at curbing subsidy leakage and smuggling, data could be vulnerable to unauthorised access, which will lead to identity theft, financial fraud and misuse of personal information, Siti Ayu said, adding that data encryption, regular system audits and secure authentication methods are critical to safeguarding user information.

“The government and financial institutions must educate the public and promote safe digital payments. They must be transparent about how users, data are being used to guarantee the security and reliability of the subsidy distribution payment system,” she said.

Additionally, digital tools such as e-wallets may not be user-friendly for the elderly, who may also be more cautious in using digital payment systems given their unfamiliarity with the technology.

Siti Ayu cites chief statistician Datuk Seri Dr Mohd Uzir Mahidin as saying that those aged 60 and above represent 11.6%, or 3.9 million individuals of the population. “Bear in mind that this vulnerable group often has the utmost need for subsidies and the government should be sensitive and cater to their needs, instead of putting obstacles in their way,” she said.

The UTM head of legal and quality also said that it is unfair to target individual users for resolving the issue of subsidy leakage, and said that a local study has proposed a flexible subsidy distribution model called FlexFuel, which can be tailored to vehicle type, income group or tax residency.

“This approach would ensure that only eligible citizens benefit from the scheme, prevent foreigners from accessing subsidised petrol, minimise subsidy abuse, maintain the country’s long-term financial stability and indirectly reduce fuel consumption,” she said.

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Learn more: RON95 Fuel Subsidy