KUALA LUMPUR (Oct 1): The Ministry of Domestic Trade, Cooperatives and Consumerism today announced that the price for RON95 petrol and diesel will be increased by 20 sen per litre effective Oct 2, 2014.
Following the reduced subsidy, the new retail price for RON95 will be RM2.30 per litre, while diesel fuel will cost RM2.20 per litre.
The current market price for RON95 is RM2.58 per litre, while diesel is RM2.52 per litre.
Despite the cut in subsidy, the government would still need to spend more than RM21 billion on RON95, diesel and liquefied petroleum gas subsidies for this year, said the Ministry in a statement.
"This move is in line with the government's subsidy rationalisation plan to ensure that the country’s finance remained strong," the ministry said in a statement.
The ministry said the reduced subsidy would result in savings that could be utilised for the development of education, healthcare, and comprehensive and efficient public transport system, as well as enhancement of national security.
The ministry said the government is aware that the subsidy rationalisation would have an impact to the economy and society.
Hence, it said the government will continue to provide assistance and incentives to ease the burden of the people, particularly low and middle-income earners.
In this regard, one of the measures to be taken by the government is to increase the 1Malaysia People's Aid (BR1M), which will be announced in the 2015 Budget, it said.