KUALA LUMPUR: Malaysia’s petrol prices, presently among the lowest in Southeast Asia, will be raised soon to reduce the heavy government subsidy, a minister said yesterday.
Domestic Trade and Consumer Affairs Minister Muhyiddin Yassin said the government’s bill for the petrol subsidy had surpassed five billion ringgit ($1.3 billion) over the past eight to 10 years.
“There is a possibility (of a price increase) but we have not decided on the quantum of the increase,” he was quoted as saying by the national news agency Bernama.
Muhyiddin said the Finance Ministry was still reviewing the matter and any hike would take into account factors including transport costs, inflation and the impact on the nation’s economic recovery.
“If the price is increased, it will still be low compared to others in the region except Indonesia,” he said.
“We do not want to burden the people with higher costs but at the same time, the government is not able to bear the cost by providing a large subsidy forever.” Bernama quoted Zainal Aznam Yusof, Institute of Strategic and International Studies deputy director-general, as saying that the price revision was imperative amid a sharp increase in crude oil prices.
Aznam said Malaysia’s petrol, diesel and liquefied petroleum gas (LPG) prices were the lowest in Southeast Asia after Indonesia. Its petrol price is 160 per cent and 35 per cent less than in Singapore and Thailand respectively.
He said government subsidy on petroleum products was expected to exceed one billion ringgit this year, up from 228 million in 1997.
According to Bernama, the controlled retail price of unleaded petrol in peninsular Malaysia is 1.10 ringgit a litre, leaded petrol 1.06 ringgit, diesel 0.651 ringgit and LPG 1.18 ringgit.
© Agence France Presse.
