Malaysia Fuel Subsidy System Revamped
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Thursday, 05 June 2008 |
Malaysia's petrol price will rise 40 percent to 2.70 ringgit (0.84
dollars) a litre from today (Thursday 5th June) as controls are removed
under a revamped subsidy system, the prime minister said.
Domestic Trade Minister Shahrir Samad said that under the new
scheme, drivers of smaller vehicles will receive a cash payment to
offset the rising costs.
"For cars 2000cc and below, they will get back 625 ringgit in cash
payments as a form of direct subsidy," he said, adding that this
equated to subsidising some 800 litres of fuel.
Shahrir said that the new price of 2.70 ringgit did not reflect the
full market value, which could be as high as 3.00-4.00 ringgit when the
price controls are completely removed in August. He said that the
increase would impact on inflation, which came in at 3.0 percent in
April.
"With this hike, the CPI (consumer price index) is expected to rise to 5.0 percent" this year, he said.
The minister said that without the new measure, the government's actual
payout for oil subsidies would have totalled 28 billion ringgit this
year, and that it will now save some 4.0 billion ringgit.
Malaysia has already moved to ban sales of subsidised fuel to Thais and
Singaporeans who make trips across the border to fill up their tanks.
"We want to pay the subsidy directly to those who deserve them. We do
not want foreigners to benefit from our subsidy," Shahrir said.
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