Malaysia sets aside 3 billion ringgit to finance fuel subsidies

Malaysia's Finance Minister Lim Guan Eng speaks during a news conference in Putrajaya

The retail price of RON95 will remain unchanged for the rest of the year.

The Malaysian government has decided to set the price of RON95 at RM2.20 per litre while diesel is set at RM2.18 per litre

Meanwhile, the price of the premium RON97 from 7 June until 13 June has been set at RM2.66 per litre. This means that the price of RON97 this week is 19 sen higher than the previous rate of RM2.47 per litre, which had been maintained for weeks before this.

The Finance Ministry has announced that the prices of RON95 and diesel will remain unchanged for the rest of 2018. However, the price of RON97 will be floated on a weekly basis to follow market prices.

The current retail prices for RON95 and diesel are said to be cheaper than the market rates

Although global oil prices have gone up recently, the prices of RON95 and diesel in Malaysia can be maintained below the market rate because the government has offered fuel subsidy.

The matter was confirmed in a statement by the Finance Ministry on Thursday, 7 June.

According to Finance Minister Lim Guan Eng, the federal government will subsidise 33 sen per litre for all retail purchases of RON95 and diesel for this week.

Stating that global crude oil prices have reached USD76 per barrel while refined petrol and diesel products are currently priced between USD87 and USD88 per barrel, Guan Eng said in the statement that prices of RON95 and diesel would have increased to RM2.53 and RM2.51 per litre without the subsidy.

It was revealed that the government has set aside RM3 billion to subsidise pump prices for the next six months

“The federal government has allocated RM3 billion until the end of 2018 to finance the subsidy and to maintain the RON95 and diesel retail prices for the rest of the year,” Guan Eng said.

Previously, Prime Minister Tun Dr Mahathir said that the government will offer fuel subsidies if there are inefficiencies.

Source: says.com; Image source: Reuters

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