Hike in petrol and diesel prices from tomorrow
News update from The Star Newsdesk
PETALING JAYA: The price of petrol will increase by 10 sen per litre and the price of diesel at petrol stations will go up by 20 sen effective Thursday.
Following the Cabinet’s decision on Wednesday, the price of RON97 petrol will be RM1.52 per litre while RON92 will be RM1.48 per litre in Peninsular Malaysia.
In Sabah, the price of RON97 will be RM1.50 per litre and RON92 will be RM1.48 per litre. In Sarawak, RON97 will be RM1.51 and RON92 is RM1.48.
The price of diesel at petrol pumps will go up from 88.1 sen to RM1.081 per litre in Peninsular Malaysia, while the new price will be RM1.084 per litre in Sabah and RM1.078 per litre in Sarawak.
The Prime Minister’s Office said in a statement that the increase was to curb the further increase in subsidies which the government had to pay for petroleum products. Last year, such subsidies cost the government RM4.8bil.
With the new rates, the expected subsidy this year would be RM6.7billion, allowing the government to save RM2.2billion as the estimated subsidy this year was RM8.96billion had the prices remained the same.
The statement said even with the new prices, fuel in Malaysia was still lower than in many Asean countries.
Subsidies, the statement added, were not a good way to help sectors which needed them because it created market distortion.
This would subsequently result in an inefficient manner of fuel consumption.
“Market distortion will bring about abuses where subsidised fuel is sold to those who are not entitled,” it said.
It added that it also brought about smuggling of fuel to neighbouring countries which had higher prices, which meant taxpayer’s money was benefiting people outside the country.
“Assuming that 10% of supply was smuggled, this means RM480mil of taxpayer’s money would have been lost to the benefit of non-Malaysians last year,” it said.
With the increase in price, difference between market and subsidised prices would be narrowed. This should reduce abuse and smuggling, it said.
Despite skyrocketing international prices, it said the increase in retail price for petrol and diesel in Malaysia was low.
“Although the international price of petrol had gone up by 65.35 sen a litre and diesel by 75.49 sen per litre between January last year and April this year, the retail price in Malaysia only went up by 7 sen per litre for petrol and 12 sen per litre for diesel during the same period,” it said.
The price of diesel went up by 5 sen two months ago while the last increase for petrol - also by 5 sen - occurred in October last year.
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