The fuel subsidy rationalisation for RON 95 petrol can be expected to be carried out in stages, said TA Securities chief analyst Kaladher Govindan, reported Harian Metro.
The Malaysian government may take some time to evaluate the impact of the floated retail price of diesel fuel, and the readiness of the Pangkalan Data Utama (PADU) database in order to determine the cash assistance required before carrying out the subsidy rationalisation for RON 95 petrol, Kaladher said.
Implementing the subsidy rationalisation for RON 95 petrol is more complex than that for diesel fuel because of its significant impact upon the majority of registered vehicles in Malaysia, which is around 36 million vehicles, which contributed to RM66.7 billion in sales of retail fuel last year, he said.
The subsidy rationalisation cannot be rushed before a proper system is in place, and the government is likely to implement the rationalisation in the fourth quarter of this year before revising it in stages until 2025, he continued.
Additionally, further details on the fuel subsidy will be tabled in Budget 2025 that has been scheduled for October 2024, and by that time, the government will have had several months of data on inflation between June and September 2024 to evaluate the results of the mechanism for the diesel subsidy, Kaladher said in a TA Securities’ mid-year report, according to Harian Metro.
On one hand, the removal of petrol subsidy could increase the retail price of RON 95 petrol from its current rate of RM2.05 per litre by RM1.25 to RM3.30 per litre, though on the other, implementing the subsidy rationalisation for RON 95 petrol could bring even more savings to the government, he said.
Assuming 20 billion litres of fuel is consumed this year, every 10 sen increase in fuel price will bring around RM2 billion in savings from fuel subsidies each year according to Kaladher. In its inflation forecast, TA Securities expects an adjustment of 40 sen to the retail price of RON 95 petrol, raising it to RM2.45 per litre.
However, the RM8 billion in savings from fuel subsidies may only be realised next year, depending on the quantum and duration of the fuel price adjustment, and more could be saved if the RON 95 subsidy rationalisation takes place this year, according to the TA Securities report.
The fuel subsidy rationalisation programme began on June 10, with the retail price of diesel fuel sustaining a 56%, or RM1.20 increase to RM3.35 per litre in Peninsular Malaysia. The fuel continues to be priced at RM2.15 per litre in East Malaysia.
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all big sharks and crocodiles corruption cases never solved…..year in year all sorts of leakages, abuse of powers, hanky panky nener resolved……now all wanna talk cock reduce subsidies ….haha fark
please dont waste time with these small increases cause the wontonmee gonna increase anyway just do a major increase and be done with it
Rm 4 or Rm4.5 /litre,Rafizi…we dont give a damn of your surprises.
You can use the same tactic for diesel.The rakyat is better prepared this time.
Former deputy menteri Ong Kian Meng predicted backlash very soon.
There is a saying “enough is enough”.
Then remove AP and high duty taxes on our cars
Increase in stages is thecreal stupid sohai. Those sohai who calculate in surface in theory really sohai if they really increase in stages, because you created the oppourtunities for the goods price to increase in multiple times as example if increase price in 10x times then those businessman will increase the goods price everytime total up to 10x times. If u 1time float to market price then the impact only 1 time. Now u see many businessman who run commercial transport using diesel not apply for subsidy because they millionair businessman no need your hundreds ringgit of subsify, only gomen stupid foc them diesel subsidy.
The price of RON 95 can be increased to RM2.50 per litre before subsidies can be removed.
Those self proclaimed economy specialist, economic analiser are making nonsense prophecy and making rakyat knee jerk reactions.
This statements make round into haters TikToks just for the sake to make people angry, just like Blackrock drama.
G have many other option to meets its fiscal target. Not replacing just pension government servants, and now rampantly using MACC to get rid those corrupted officers so G can save a lot on OE.
Since last year, the OE for G office has been slash to half, no makan-makan during meeting and no hotel based function anymore two of the many. Even PM don’t take his pay eitjer foe his PM post or even the Finance Minister post. Bot forgetting other GLCs perks too.
the removal of MPs multiple pension and allowances can start in stages too.
just increase RM5 to ease the traffic, need to get rid of those 20 years old car also, classic car kononnya, go in highway then breakdown
got inspired, Pay @ RM5/L and give 33% cash back system autopay by 3rd week of the month.
RM5 – 33% = RM3.30/L
ni macam like forced saving, Rakyat ada money rolling.
so tak rasa bankrupt by 3rd week no balance money survive.
RM5 for 12km/L 2000km = RM 833
cash back 33% @ 3rd week = RM 275
this can confuse Noob use more for more cash back.
even though it is 33% cash back fixed.
but it help Noob to survive over spending.
Cooking frog in warm water…haaa
Everytime increase, kopi +20sen. Better increase to 3.30, kopi still +20sen
Stop Ron95, introduce Ron92 again, and maintain Ron97 as per previous years.
just rip the band-aid off completely. Do it at once. No stages. Let everyone complaint and moan once and get on with life. Rakyat is tired of changes every so often. So just change it and be done with it. remove tongkat.
If, and I say If the government really wants to remove the subsidy, I suggest to do it in one go rather than in stages.
At least businessman will use this excuse to raise price one time rather than multiple times if it is implemented in stages.
Even Kopitiam will find excuses the raise price. If it is being done one time, maybe Kopi-O will be increased by 50cents. If government do in stages lets say 3 times, Kopi-O will be increased by 50+50+50 cents. Lets be realistic, the way business owners increase prices sometimes tak masuk akal..
Let that sink into our mind for awhile..
Remove subsidies, they are inefficient and distort the market, especially one with rampant corruption.