Thursday June 5, 2008
Petrol price up by 78 sen - and will be reviewed monthly
PUTRAJAYA: The Government announced yesterday an increase in petrol and diesel prices, stating that it can no longer continue to subsidise fuel. Prime Minister Datuk Seri Abdullah Ahmad Badawi said the new prices were still at a 30-sen per litre discount from market prices. In other words, if the market price is RM3 per litre, Malaysians will be charged RM2.70 at the pump. He said the price would be adjusted monthly based on the global oil price.
“Malaysians still pay lower than the market prices as far as petrol is concerned,” he told a packed press conference when announcing the restructuring of the subsidy package. Abdullah said that although the restructuring would result in consumers having to pay more, prices were still lower compared with Singapore and Thailand.
He said the Government would save RM13.7bil through the restructuring. From the savings, he said RM4bil would go to the National Food Supply Guarantee Policy, RM1.5bil for subsidising cooking oil and RM400mil to subsidise rice imports to make the price uniform in peninsular Malaysia, Sabah and Sarawak. The Government would also spend RM200mil on flour subsidy, RM100mil on bread subsidy and RM7.5bil was meant for contributions to the subsidies for petrol, diesel and gas. On top of that, Abdullah said, the Government would have to fork out RM5bil to pay to owners of cars and motorcycles eligible for rebates introduced under the restructuring of subsidy package.
“Our effort is certainly not an attempt to be popular but we try our best to help the people. We cannot satisfy everyone,” he said. Abdullah said demand for public transport would go up with the rise in fuel prices and the Government was currently addressing the need to improve services.
He reiterated that the public should make changes to their lifestyle, saying they must ensure there was no wastage in resources such as water, energy and food. He said if certain adjustments were made, the public would not be “too badly affected by price increases”. He said the hike in fuel prices would cause a projected increase in inflation of around 4% to 5%. It would also have an impact on the country’s gross domestic product (GDP) growth but was confident that it could be maintained at 5% this year.
Abdullah said the Cabinet committee on anti-inflation had to come up with a system to ease the public’s burden from higher fuel prices. “What is important is that we want to ensure the restructuring will encompass a mechanism that will protect and benefit those in the lower and middle income group. “We are truly committed in ensuring these groups will not be burdened by the increase in petrol and food prices,” he said.
Asked if the subsidy restructuring would result in Malaysians going to the streets to demonstrate their unhappiness, Abdullah was confident the people would not resort to that.
The ChangesPrice increase
Petrol – RM0.78/litre
Diesel – RM1/litre
Electricity:
Commercial and industrial – 26%
Retailers and small restaurant operators – 18% (for first 200kWh per month)
Residential – new pricing structure for users above 200kWh per month
Prices effective today (per litre)
Petrol – RM2.70 (previously RM1.92)
Diesel – RM2.58 (previously RM1.58)
Rebates
> RM625 per year
For private vehicle with engine capacity of 2000cc and below, including private pickup trucks and jeeps with engine capacity of 2500cc and below.
> RM150 per year
For each private motorcycle with engine capacity of 250cc and below
> RM200 reduction on road tax
For private petrol and diesel vehicles with engine capacity above 2000cc
> RM50 reduction on road tax
For private motorcycles with engine capacity above 250cc
Streamlined diesel subsidy
(for approved transportation companies, vessel owners and fishermen)
> Diesel – RM1.43 per litre (previously RM1 per litre for fishermen and RM1.20 per litre for vessel owners)
> RM200 per month for every owner and employee of Malaysian-owned vessels registered with the Fisheries Department
> 10sen per kilo incentive for every kilogram of fish caught by registered vessels
> 10sen per litre for every litre of diesel used by river transportation operators according to approved quota
Gas subsidies restructure
(for Peninsular Malaysia)
> For power producers – from RM6.40 per mmBtu to RM14.31 per mmBtu
> For industrial users (consuming less than 2mmscfd) – from RM9.40 per mmBtu to RM24.54 per mmBtu
> For industrial users (consuming above 2mmscfd) – from RM11.32 per mmBtu to RM32.56 per mmBtu
Electricity tariff restructure
> Households using 200kWh and below every month will not be affected. This covers 59% of households in Peninsular Malaysia with a monthly bill under RM43.60.
> Commercial and industrial users face 26% increase. Small retail and business outlets consuming under 200kWh per month face 18% increase.
Liquefied Petroleum Gas (LPG) and
Natural Gas for Vehicle (NGV)
> No change. Prices remain at RM1.75 per kg (LPG) and RM0.635 per litre (NGV)
Oil palm windfall tax
> For Peninsular Malaysia 15% for every tonne of CPO exceeding RM2,000
> Sabah and Sarawak 7.5% for every tonne of CPO exceeding RM2,000 > Abolition of cess tax
Service tax threshold for restaurants and eateries
> Service tax now for restaurants with annual sales of RM3mil (previously RM500,000)
