Petrol Cards

A recent news article says that our government is looking at adopting a system whereby motorists can buy a fixed amount of subsidised fuel each month and pay for the rest at market rate. Second Finance Minister Tan Sri Nor Mohamed Yakcop said the system includes providing Malaysian motorists with a special card for buying subsidised fuel. Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad said that the present cash rebate system was not the perfect long-term solution, judging from the crowds of people rushing to collect their rebates. Shahrir said that as this was the first time the rebates were being given, there was plenty of room for it to be upgraded and improved upon.

All these important members of the cabinet, speaking on the issue, barely days after the fuel rebate system was kicked into service by the government, just does not make me sleep well at night. It clearly shows that this decision was rashly made without any sort of planning beyond the type that you do on the back of a napkin. However, that is not the main problem that I have with the whole idea of introducing a fuel card system.

Personally, I just see this fuel card system as a way for certain people to make more money. I do not understand why the government needs to issue a new card system for millions of citizens in the country, when everyone already owns the GMPC MyKad. Each and every one of us already has a smart card that holds our personal information.

Incidentally, with some foresight, our driving license information is already stored on these cards. The Road Transport Department (JPJ), is in charge of both motor vehicle registrations as well as issuing and renewing driving licences. Regardless of whether the rebate is per vehicle or per driver, the relational information between vehicle owners and valid drivers is already sitting in their databases.

On top of that, the MyKad is also tied to the MEPS system, which allows it to serve as a debit card. Therefore, the necessary framework for building a complete fuel payment and rebate system is already present on the card itself. As biometric information is also stored on the card, this can be used as an authentication layer and extra security level on the card.

There is seriously no need to build a completely new and independent system for this. Building a new an independent system would just incur unnecessary costs. It would mean that new smart cards would need to be issued. On top of that, an untested kludge would be needed to rebate someone on the fuel costs, extra to any present financial system already in place.

With the distribution of an extra card and payment system, I envision a new market cropping up for the sale and purchase of these cards. Assuming that the card allows certain amounts of fuel to be bought at below market rates, people who do not end up using their allocation of fuel will be able to sell their fuel balance to others, thus making themselves some cash. Assuming that the card has a total rebate value of RM625, anyone who needs a quick dose of cash could easily sell off the cards for RM500.

Either way, what happens is that the people who guzzle fuel, will end up abusing the system. What we actually need is a way to piggyback existing technology that is tested and secure. The MyKad already has authentication, payment and driving license information stored in it. The petrol kiosks are already securely connected to the banking networks through the credit card processing system.

Whenever fuel is purchased at the pump, the owner of the MyKad can be verified by visual inspection of the photograph, or by using a fingerprint reader. The license information can be captured along with the bank account information. These can be sent back through the banking network to the banks. The banks can then verify the information with JPJ and apply the rebates either as a discount on the payment or by debiting the person’s account directly, through the MEPS system which all the local banks tie into.

So, I don’t like this idea that is being bandied about. Period.