KUALA LUMPUR: The Domestic Trade, Co-operatives and Consumerism Ministry has announced that fuel prices of RON95 petrol and diesel will be raised by 20 sen per litre from today.
Following the reduced subsidy, the new retail price of RON95 will be RM2.30 per litre from RM2.10, while diesel fuel will cost RM2.20 per litre from RM2.
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 will still need to spend more than RM21 billion on RON95, diesel and liquefied petroleum gas subsidies this year.
“This move is in line with the government’s subsidy rationalisation plan to ensure that the country’s finances remain strong.
“The government also aims to curb leakages and smuggling of fuel by irresponsible quarters,” the ministry said in a statement yesterday.
The ministry said the subsidy should be better targeted and not given across the board.
It added that the government is aware that the subsidy rationalisation will have an impact on the economy and society.
Hence, the government will continue to provide assistance and incentives to ease the burden of the people, one of which is to increase the 1Malaysia People’s Aid, to be announced in Budget 2015, it said.
This article first appeared in The Edge Financial Daily, on October 2, 2014.