Malaysian pump prices at market rates by August: minister
Malaysia will abandon fuel price controls by August and raise pump prices to market levels under a revamped subsidy system to be unveiled on Wednesday, a minister said.
"The prime minister will announce on Wednesday an indication of where we are going in terms of a fuel subsidy system," Domestic Trade Minister Shahrir Samad told AFP.
"We have worked out the details of the subsidy plan and after the inflation committee meets today (Tuesday), it will have to be approved by cabinet," he said.
Malaysia is moving to cut the spiralling bill for its extensive petrol, diesel and gas subsidies, which is expected to cost 56 billion ringgit (17.4 billion dollars) this year.
Currently petrol sells for about 1.92 ringgit (60 cents) a litre, among the cheapest in the region.
Shahrir said the details and implementation method of the new subsidy scheme would be thrashed out by August, when the full plan is scheduled to be in place.
"What we are targeting for when the full plans are announced is that the price at the pumps throughout the country will be at market prices, so until the full plan is delivered, we will not be able to do this," he said.
Shahrir said the new subsidies would be a needs-based system, rather than the current arrangement which lowers the cost of petrol for all users no matter what their income.
He told state news agency Bernama that the government was considering mechanisms including offering cash payments or setting quotas.
The government is initially targeting Singaporeans and Thais who make day-trips across the border to fill their tanks with fuel that is substantially cheaper here.
On Monday, it shut off petrol sales to Thais on its northern border and will also ban sales of petrol to visiting Singaporeans in the southern state of Johor from June 9 as an interim measure ahead of the new subsidy mechanism.
The government is braced for a public backlash over any further fuel price hikes, in a country where public transport is poor and many people are dependent on their cars.
The ruling coalition suffered its worst ever results in March 8 elections, losing five states and a third of parliamentary seats in a setback partly credited to anger over high prices of food and fuel.
My 2 cents worth: Sigh!!! petrol price raise again? Price for everything also will follow, up and up. Who will suffer? The people. We pay tax to the government and they use the money to subsidies for the petrol, which mean we indirectly already paying for the petrol money. Now that they are announcing that the petrol price will follow the market rate, which means the people will have to pay more.
The government always said that our fuel is the lowest in the region, for example when comparing to Singapore. Thus the people should not complaint. However, they fail to note that Singaporeans are earning far more than us in Malaysia. For example, a sales executive in Singapore earn more than a sales executive in Malaysia, thus, when face with higher living expenses, to them is not a problem. Therefore, how can you compare a apple to orange?
No matter what we all say, the fuel price is definitely going up.
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