Oil spike puts RON95 subsidy cut back in play

Policy watch: A local motorist refuels his vehicle at a petrol station. The main risk to Malaysia’s inflation outlook comes from the extent of adjustments in domestic fuel prices.

PETALING JAYA: Putrajaya may be forced to tighten its RON95 subsidy mechanism by either cutting the current 300-litre monthly subsidised quota or raising the pump price back to RM2.05 per litre, analysts say.

They noted that both measures are emerging as realistic policy options if crude oil prices remain elevated and deepen the strain on government finances.