PETALING JAYA: The price of RON95 petrol and (Euro 2M) diesel has been capped at RM2.05 and RM2.15 per litre respectively, following the rise of global crude oil prices, says Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
He said the newly announced price cap for RON95 and diesel is lower compared to the price cap implemented by the previous Pakatan Harapan government in 2019, which was RM2.08 for RON95 and RM2.18 for diesel.
“The government will cover the difference between the actual market price and the weekly retail price that is set weekly through the subsidy allocation, ” he said in a statement yesterday.
Zafrul said the government decided to introduce the cap because the actual market price for petroleum has been rising, along with the demand for crude oil, fuelled by the reopening of various economic sectors in the world.
“The global oil price is also influenced by the Covid-19 vaccination plan that is beginning to gradually take off around the world.
“Malaysia itself will start its national immunisation programme at the end of February, ” he said.
Zafrul also said the government is committed to reducing the cost of living and will always monitor the effects of changes in global crude oil prices.
“We will also take appropriate measures to balance government subsidies and the need to maintain the welfare and well-being of the people, ” he added.
Reuters reported that oil prices in global markets rose on Tuesday for their seventh straight session of gains, hitting 13-month highs as investors kept speculating that fuel demand will rise while Opec and allied producers keep a lid on supply.
The report said Brent crude settled up US$0.53, or 0.9% higher to US$61.06 a barrel. US West Texas Intermediate crude (WTI) for March was at US$58.36 a barrel, up 39 cents or 0.7%.
The session peaks for both benchmarks were the highest since January 2020.
“With Brent over US$60, it’s been great psychologically... and everyone is feeling bullish about stronger demand and global inventories in further decline, ” said John Kilduff, partner at Again Capital LLC in New York.
The report added that the markets have rallied since last November as Covid-19 vaccines are being distributed, and as governments and central banks dish out stimulus packages to boost economic activity.