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Thursday June 5, 2008
PUTRAJAYA: The Government announced yesterday an increase in petrol and diesel prices, stating that it can no longer continue to subsidise fuel.
Prime Minister Datuk Seri Abdullah Ahmad Badawi said the new prices were still at a 30-sen per litre discount from market prices.
In other words, if the market price is RM3 per litre, Malaysians will be charged RM2.70 at the pump. He said the price would be adjusted monthly based on the global oil price.
“Malaysians still pay lower than the market prices as far as petrol is concerned,” he told a packed press conference when announcing the restructuring of the subsidy package.
Abdullah said that although the restructuring would result in consumers having to pay more, prices were still lower compared with Singapore and Thailand.
He said the Government would save RM13.7bil through the restructuring.
From the savings, he said RM4bil would go to the National Food Supply Guarantee Policy, RM1.5bil for subsidising cooking oil and RM400mil to subsidise rice imports to make the price uniform in peninsular Malaysia, Sabah and Sarawak.
The Government would also spend RM200mil on flour subsidy, RM100mil on bread subsidy and RM7.5bil was meant for contributions to the subsidies for petrol, diesel and gas.
On top of that, Abdullah said, the Government would have to fork out RM5bil to pay to owners of cars and motorcycles eligible for rebates introduced under the restructuring of subsidy package.
“Our effort is certainly not an attempt to be popular but we try our best to help the people. We cannot satisfy everyone,” he said.
Abdullah said demand for public transport would go up with the rise in fuel prices and the Government was currently addressing the need to improve services.
He reiterated that the public should make changes to their lifestyle, saying they must ensure there was no wastage in resources such as water, energy and food.
He said if certain adjustments were made, the public would not be “too badly affected by price increases”.
He said the hike in fuel prices would cause a projected increase in inflation of around 4% to 5%. It would also have an impact on the country’s gross domestic product (GDP) growth but was confident that it could be maintained at 5% this year.
Abdullah said the Cabinet committee on anti-inflation had to come up with a system to ease the public’s burden from higher fuel prices.
“What is important is that we want to ensure the restructuring will encompass a mechanism that will protect and benefit those in the lower and middle income group.
“We are truly committed in ensuring these groups will not be burdened by the increase in petrol and food prices,” he said.
Asked if the subsidy restructuring would result in Malaysians going to the streets to demonstrate their unhappiness, Abdullah was confident the people would not resort to that.
Petrol – RM0.78/litre
Diesel – RM1/litre
Commercial and industrial
Retailers and small restaurant operators
– 18% (for first 200kWh per month)
Residential – new pricing structure for
users above 200kWh per month
Prices effective today (per litre)
Petrol – RM2.70 (previously RM1.92)
Diesel – RM2.58 (previously RM1.58)
> RM625 per year
For private vehicle with
engine capacity of
2000cc and below,
including private pickup
trucks and jeeps with engine capacity
of 2500cc and below.
> RM150 per year
For each private motorcycle
capacity of 250cc and
> RM200 reduction on
For private petrol and diesel vehicles with
engine capacity above 2000cc
> RM50 reduction on road tax
For private motorcycles with engine capacity
Streamlined diesel subsidy
(for approved transportation
vessel owners and fishermen)
> Diesel – RM1.43 per litre (previously RM1
per litre for fishermen and RM1.20 per litre
for vessel owners)
> RM200 per month for every owner and
employee of Malaysian-owned vessels registered
with the Fisheries Department
> 10sen per kilo incentive for every kilogram
of fish caught by registered vessels
> 10sen per litre for every litre of diesel
used by river transportation operators
according to approved quota
Gas subsidies restructure
(for Peninsular Malaysia)
> For power producers – from RM6.40 per
mmBtu to RM14.31 per mmBtu
> For industrial users (consuming less than
2mmscfd) – from RM9.40 per mmBtu to
RM24.54 per mmBtu
> For industrial users (consuming above
2mmscfd) – from RM11.32 per mmBtu to
RM32.56 per mmBtu
Electricity tariff restructure
> Households using
200kWh and below
every month will not
be affected. This covers
59% of households in Peninsular
Malaysia with a monthly bill under
> Commercial and industrial users face
26% increase. Small retail and business
outlets consuming under 200kWh per
month face 18% increase.
Liquefied Petroleum Gas (LPG) and
Natural Gas for Vehicle (NGV)
> No change. Prices
remain at RM1.75 per
kg (LPG) and RM0.635 per litre (NGV)
Oil palm windfall tax
> For Peninsular
Malaysia 15% for every
tonne of CPO exceeding
> Sabah and Sarawak 7.5% for every tonne
of CPO exceeding RM2,000
> Abolition of cess tax
Service tax threshold for restaurants and eateries
> Service tax now for
restaurants with annual
sales of RM3mil (previously RM500,000)
Foreign car fuel ban off
New ruling goes down well with Singaporeans
New scheme will make economy more efficient
Putting the skids on buses, lorries
Get ready for aftermath, Government warned
Many find the increase hefty and will affect their lifestyles
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Scenes of chaos at petrol stations
Ka Chuan: We have no choice
Another burden for us, say the disabled
Cooking gas delivery charges may go up
Idris: There’s no global fuel shortage
Shahrir studying ferry operators’ request for subsidised diesel
Muhyiddin: We’ll help industries
Electricity rates go up
Fire breaks out in Bukit Aman
Chaos unfolds at rally near Sogo
Cabinet reshuffle: Who's in, who's out
China escalator swallows toddler's mother
Mukhriz pays visit to Muhyiddin
Opposition MPs to move no-confidence vote against Najib
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