KUALA LUMPUR: The Federation of Malaysian Consumers Associations (Fomca) views the government decision to scrap the tiered fuel subsidy plan as "a big disappointment and a great mistake".

Its president, Datuk N. Marimuthu, said if the plan had been carried out, people who really needed it would have benefited from it.

The government could then focus on other fields like healthcare, education and welfare, he added.However, Marimuthu argued that the government could not continue giving subsidies for long

"We need to have an exit strategy towards subsidies.

"No one can give subsidies forever," he told the New Straits Times.

He said the government needed to be practical and have the political will to do the right thing.

"We need bold decisions from the government and not just to decide on something just to win elections."

Petrol Dealers Association of Malaysia (PDAM) president Datuk Hashim Othman said it welcomed the government's decision.He also said association members had been prepared for the new plan, with some planning conferences to explain it.

"Although the plan was good, as the right group would benefit from it, we were only worried about its implementation."

Scrapping the plan was good for now as it would give the government more time to conduct studies on the matter, Hashim added.

The tiered fuel subsidies were to be implemented on May 1, with the price of petrol to be based on engine capacity while non-Malaysians were to pay the market price.

The new plan was proposed as the government felt that target groups were not benefiting from the fuel subsidies.