RON95 petrol will cost RM4.37 per litre, if the government eliminates the petrol subsidy!
If the government eliminates the petrol subsidy, RON95 petrol will cost RM4.37 per litre!
During the post-epidemic period, the international oil price soared to more than $100 per barrel, owing to military tensions in Russia and Ukraine. Fortunately, the government implemented the RON95 gasoline and diesel price ceiling mechanism, which allowed the domestic inflation rate to be stabilised at around 2.3 percent.
According to MIDF forecasts, removing the government subsidy for RON95 petrol and diesel will result in a price of RM4.37 per litre of RON95 petrol and RM4.67 per litre of diesel.
The government’s fuel subsidy mechanism has reduced the price of RON95 petrol to RM2.05 per litre, while diesel is now RM2.15. This converts to RM2.32 per litre of RON95 petrol and RM2.52 per litre of diesel subsidised by the government.
The government has frequently stated that it will review the fuel subsidy mechanism because the current mechanism increases the country’s financial burden, and the subsidy benefits high-income groups. Currently, the high-income T20 group receives roughly half of the subsidy.
The government intends to implement targeted fuel subsidies to help those in need. Following the national election, the government will most likely officially launch a targeted fuel subsidy scheme.
