KUALA LUMPUR: The ban on the sale of subsidised fuel to foreign-registered vehicles went ahead yesterday, but only along the northern border. A similar ban in the south would kick off later.

Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad, when announcing this, said motorcycles would be exempted.

He said as Malaysia placed emphasis on the lower income group, the same principle applied to those using motorcycles, whether from Thailand or Singapore.

Shahrir said since the implementation (at border towns in the north), he had received reports of petrol stations losing some business.

Asked if the ban penalised petrol stations located within 50km of the border, Shahrir said it did, but they should look at it from the view that it was a temporary measure and that they had benefited for some time already.

"We are looking at the overall margins that they are enjoying now, and when the prices of fuel go up, we will try to ensure that they retain their margins," he told a press conference at Dewan Negara yesterday.

"We may restrict the opening of new petrol stations in the areas. It is not right to trade in a product that is heavily subsidised and then complain."

Shahrir said the ban might not be relevant once the Subsidy Management System for Fuel is implemented, most probably in August.

"Fuel prices do not stay static. We have to be prepared for changes as they occur," he said.

"The current mechanism used to subsidise fuel is based on usage and not need. Subsidies must be given to those who need help."

Asked if there was a mechanism for Malaysian owners of Singapore-registered vehicles, Shahrir said he sympathised with them.

"But as Malaysians who are paid in Singapore dollars and who think nothing of buying Singapore cars, to save S$20, they could go to petrol stations located outside Johor Baru, maybe during their days off, to purchase fuel," he retorted.

He added that the subsidy on fuel was expected to increase by RM56bil a year.