This article first appeared in The Edge Financial Daily on November 21, 2017

KUALA LUMPUR: The government said it will identify measures to reduce the impact of rising oil prices if the retail prices of RON95 petrol and diesel breach RM2.50 per litre for three consecutive months.

In a statement yesterday, the finance ministry said it has taken note of rising retail fuel prices in the face of the uptrend in global crude oil prices, which have breached US$60 (RM249.60) per barrel.

“Currently, the government has implemented subsidy rationalisation on petroleum products in tandem with the trends of worldwide crude oil price movements,” said the ministry.

“This step has successfully reduced leakage and ensured that the subsidy is directed [at the right recipients],” it added.

The finance ministry also gave assurance that any measure adopted will ensure that the public is not burdened by the oil price hike, and that inflation will remain under control in the medium and long term.

Malaysia currently fixes retail fuel prices on a weekly basis, calculated using an automatic pricing mechanism. The government still provides subsidies to the public transportation sector, fishermen and to liquefied petroleum gas consumers.

The price of RON95 petrol in Malaysia is currently retailing for RM2.38 per litre, up seven sen from last week. The price of diesel rose five sen to RM2.25 a litre.