Rumours surfaced last week regarding another fuel price increase, leading deputy finance minister Datuk Ahmad Maslan to come out and deny talks that there will be a 10 sen hike for RON 95 and a 15 sen hike for RON 97. It was just earlier this month that the price of RON 95 petrol and diesel jumped by 20 sen to be RM2.10 and RM2.00 per litre, respectively.
People are jumpy, and it is fertile ground for rumours such as the above to take root and grow. But Malaysians can expect no fuel price increase in the near future, an economist with Alliance Research, Manokaran Mottain, told Bernama. Mottain is a member of the high-powered National Economic Action Council (NEAC).
“The people are still in the midst of absorbing it (the fuel price hike). Any subsidy rationalisation will only be decided when it is really necessary,” he told the national news agency.
Mottain added that the Fiscal Policy Committee (FPC), chaired by PM Datuk Seri Najib Tun Razak, will only convene every six months. The FPC, which was set up earlier this year, was established to work out the government’s fiscal deficit target, which is 4.0% of GDP this year, 3.0% of GDP by 2015 and a balanced budget by 2020. Key to this is subsidy rationalisation, which has already kicked off, and the subsidisation of fuel is a substantial part of that.
In August, the actual price of RON 95 petrol was RM2.79 per litre, while that of diesel was RM2.73, and at the previous retail rate at the pump of RM1.90 per litre for RON 95 and RM1.80 for diesel, per litre government subsidisation was 89 sen for RON 95 and 93 sen for diesel.
In September, the unsubsidised price of RON 95 is listed as RM2.73 per litre, and that of diesel RM2.80. With the increase in pricing by 20 sen for both RON 95 and diesel on September 3, per litre government subsidisation at the pump dropped to 63 sen for RON 95 and 80 sen for diesel as a result of the hike. Meanwhile, the price of RON 97 was also increased by 15 sen to RM2.85 on September 4.
The government says that following the recent cut in fuel subsidies, it will save about RM1.1 billion this year, and if extrapolated to a full year, savings can reach RM3.3 billion per annum. A massive RM24.8 billion has been allocated for fuel subsidies this year.
So, no fuel price hike for now.