As the government begins shifting away from expensive blanket subsidies to a targeted approach that primarily aids the underprivileged, diesel fuel prices in much of Malaysia are expected to increase by about 50 % on Monday ( Jun 10 ).
Malaysia, which subsidizes energy, cooking oil, and corn among other basic commodities at record highs in recent years as a result of rising commodity prices and strained government finances, has seen its payment bill rise to record levels.
Its fuel subsidy costs only has risen 10- slide from RM1.4 billion in 2019 to RM14.3 billion dinars in 2023.
The government , said last month , its plan to cut fuel subsidies this year is expected to save about RM4 billion ( US$ 853.24 million ) yearly, with the benefits expected to be be- directed to low- money groups.
In a statement released on Sunday, the Finance Ministry announced that it would begin setting fuel energy costs in accordance with industry rates.
Starting at midnight, all petrol stations along the Peninsular Malaysia will start charging RM3.35 per gallon, according to the department.
In Indonesian states and territories on Borneo, as well as for qualified logistics vehicles, the president’s subsidised fuel power system, it will continue at RM2.15 per gallon.
According to the government, fishermen and land-based public transportation vehicles like school buses and ambulances have also been offered lower fuel prices.
The government will grant funds assistance to qualified Malaysians who own diesel cars, small-scale farmers, and product landowners in order to lessen the impact that might have on their incomes, according to the government.
Despite the subsidy cuts, diesel prices in Malaysia will remain among the lowest in Southeast Asia, with the fuel retailing at the equivalent of RM8.79 per litre in Singapore, RM4.43 in Indonesia, and RM4.24 in Thailand, the ministry said.