ASEAN KEY DESTINATIONS
Malaysia to fix fuel subsidy
Malaysia will allow retail gasoline prices to track global crude oil prices beginning September 1 by fixing the subsidy at 0.30 ringgit (about 0.09 dollar) a litre, Kyodo news agency quoted Prime Minister Abdullah Ahmad Badawi as saying Friday.
Now that global crude oil prices have trended downward, the government decided to revert to its earlier policy announced June 5, which was to fix the subsidy and to adjust pump prices according to an "average monthly market price," Abdullah said in a statement.
The pump price would now be decided on the first day of each month beginning September 1.
Abdullah, who is also finance minister, sparked a public outcry when on June 5 he raised the price of gasoline by 41 percent to 2.70 ringgit and diesel by 63 percent to 2.58 ringgit.
The global crude oil price then was around $125 per barrel. At that price, he said the government was subsidizing retail gasoline at 0.30 ringgit a liter.
When oil prices went up to $139 a barrel on June 8, he said retail gasoline prices should have gone up by 0.40 ringgit per liter but the government yielded to public pressure and decided not to raise anymore fuel prices for the whole year.
For the entire month of June, with global oil prices averaging around $132 a barrel, Abdullah said the government had to subsidize 0.64 ringgit a liter to maintain retail price at 2.70 ringgit.
While the government is grappling to cut back on the fuel subsidy, which has ballooned to 43 billon ringgit a year, the public believes it should enjoy cheaper fuel as Malaysia is a net oil-exporting country and national oil company Petronas Bhd. is flush with profits.
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