Malaysiakini – 1 hour 40 minutes ago
Putrajaya has announced it will abolish subsidies for RON95 petrol and diesel, beginning Dec 1.
Domestic Trade, Cooperative and Consumerism Minister Hasan Malek announced that both types of fuel will be sold based on a managed float system.
Hassan said the decision was made at the cabinet meeting today and gave an assurance that the managed float system for RON95 and diesel had been studied prior to this implementation.
This comes after the average retail price of RON95 in Malaysia fell below the fixed price that consumers are paying at the pump following a sustained fall in the global crude oil price.
At present, RON95 petrol price is fixed at RM2.30 a litre, while diesel is priced RM2.20.
"From Nov 1 to 19, the average RON95 price under the Automatic Price Mechanism (APM) fell to RM2.27 per litre, which is lower than the retail price of RM2.30.
"In this regard, the government will monitor the market price for Nov 20 to Nov 30 and the actual figure will determine the average retail price for December.
"If this trend continues (falling global oil price), it is expected the retail price of RON95 in December will be reduced accordingly based on the APM formula," Hasan ( right ) said in a statement today.
He said the managed float system will consider the change in global oil price as well as the currency exchange rate.
"This move is evidence of the government's intention to ensure that the rakyat can enjoy the full benefit of the falling global oil price," he said.
RON97 petrol has been under a managed float system since July 2010 and its price was slashed from RM2.75 to RM2.55 on Wednesday.
The opposition had earlier this week threatened mass protest if the government refused to slash fuel prices, pointing that the fixed price will no longer be a subsidy but instead a 'fuel tax' due to the falling global price.
Global crude oil price yesterday closed under US$75 per barrel in contrast to over US$100 per barrel in September.
Putrajaya in October increased the price of RON95 and diesel by 20 sen a litre, from RM2.10 and RM2 respectively.
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