The Malaysian government will introduce a new targeted fuel subsidy scheme beginning next year. In the first phase, the Petrol Subsidy Program will target those that fall under the B40 (Below 40) category and this will be followed by the M40 (Middle 40) segment. With this scheme in place, the price for RON95 petrol will soon be floated to market prices but it will be increased gradually. This is to ensure that the petrol price hike will not increase the prices of goods dramatically.
According to Deputy Minister of Domestic Trade and Consumer Affairs Ministry, Chong Chieng Jen, the government will float the price of RON95 petrol in stages by 1-2 sen per week until it reaches market price. This was in response to a question in Parliament by Kota Samarahan MP, Rubiah Wan.
The Deputy Minister added the bulk subsidy scheme would be implemented in Sabah and Sarawak. This means East Malaysians will continue the same RON95 price of RM2.08/litre. He also added that enforcement action will be taken against unscrupulous traders that take the opportunity to increase their prices for extra profit. The RM2.2 billion targeted fuel subsidy program is expected to benefit more than 8 million motorists in Malaysia.
Based on this week’s petrol price update, the current market price for RON95 is RM2.38/litre and the government will subsidise an estimated RM99 million to allow Malaysians to enjoy the current RM2.08/litre rate. Assuming that the market price for RON95 is still RM2.38/litre and the government will limit the price increase to 2 sen per week, it will take 15 weeks to reach its actual market pricing. Based on this calculation, RON95 could be going as high as RM2.18/litre by end January 2020 and up to RM2.26/litre by end February 2020.
Under the Petrol Subsidy Program, government will provide a subsidy of RM30/month for cars or RM12/month for motorcycles. It is applicable to eligible recipients that fulfil the following criteria:
You can learn more in our previous post.
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