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If global crude oil prices rise too high, the government will intervene to soften the blow for RON 95 petrol and diesel, deputy finance minister II Datuk Chua Tee Yong has said, according to a Bernama report.

“However, the intervention mechanism has not been finalised yet, and the evaluation process being undertaken by the Domestic Trade and Consumer Affairs ministry is still ongoing,” he said.

He added that the move to a managed float system for RON 95 and diesel, scheduled to begin December 1, was to enable consumers to enjoy the current down-trend in global oil prices. “With the current low oil prices, not announcing the float means the government has to impose tax on petrol. This is not what we want to achieve,” he said.

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Chua cited for comparison Indonesia, where he said due to taxes, RON 88, RON 92 and RON 95 are priced at the respective equivalents of RM2.35, RM2.70 and RM3.20 a litre.

He said that as the Organisation of Petroleum Exporting Countries (OPEC) has not indicated any reduction in exports, he believes there should not be any jump in global oil prices in the short term.

“However, we will continue to monitor these developments to ensure the floating of fuel prices would not be an extra burden to the people. A subsidy budget of about RM37 billion has been allocated for 2015.

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“If there is any uptrend in oil prices, it has to look into other mechanisms that can be used, either via a subsidy or assistance, to ensure people are not badly impacted,” Bernama quoted Chua as saying.

In another report by the national news agency, deputy finance minister Datuk Ahmad Maslan said that the managed float system is expected to be used on a monthly basis as long as global oil prices are below US$80 (RM267) a barrel.

He opined that beyond that price, subsidy rationalisation needs to be in place. “This does not mean the subsidy rationalisation will be comprehensive as at present but be more targeted. It could include introducing subsidies based on income,” he said.