Petrol & Diesel Prices Increase In First Round Of Subsidy Rationalisation Plan

The government has implemented the first round of what were described as “difficult but bold” decisions—the reduction of subsidies for petrol, diesel, liquefied petroleum gas (LPG) and sugar. Petrol (RON 95 and RON 97) and diesel prices have increased by five cents per litre: RON 95 now costs RM 1.85 per litre, RON 97 at RM 2.10 per litre and diesel at RM 1.75 per litre. RON 97 will be subjected to a managed float—with prices to be determined by an automatic pricing mechanism—after this round of subsidy cuts.

Even with this subsidy rationalisation plan, which could reduce governmental expenses by more than RM 750 million for this year, the government still expects to fork out an estimated RM 7.8 billion on fuel and sugar subsidies for 2010 alone. The main objective of this plan is to reduce government spending on subsidies and allocate the money saved to more efficient, longer-term uses such as investments in public infrastructure. The proposed plan to build a mass rapid transit (MRT) system, as well as the proposed plan to extend the light rail transit (LRT) system, would fall under that category.

AboutSeow Yaohan

Seow Yao Han strives to bring you the latest and the most comprehensive information on cars available in Malaysia. But it's never easy for him to talk and write cars in this part of the world because what you lust after is often not what you drive home. When the euphoria of test-driving that branded, super-expensive sports car dies down, he just goes home in his less-than-glamorous ride.