While a cash transfer system linked to the Central Database Hub (Padu) could offer Putrajaya a more efficient way to cushion households during an oil price shock, economists have cautioned that significant data gaps and implementation challenges could undermine its effectiveness.

Samirul Ariff Othman said a Padu-linked cash transfer model would likely provide a better fiscal buffer during a sudden spike in oil prices than a broad at-pump subsidy, as it would enable the government to separate fuel price from household protection. 

The alternative model...