New mechanism puts inflationary pressure on rich and poor alike

July 27, 2014

Dateline 2014-06-03, Sin Chew Daily:

Once the government has put into implementation the “eligibility for subsidized fuel purchase” mechanism, those in the low and medium income bracket are not expected to be severely affected, but it is inevitable that the public will have to confront the inflation problem thanks to rising fuel cost.

The Petroleum Dealers Association of Malaysia (PDAM) hopes the new mechanism will make things convenient for vehicle owners while not excessively increasing the burden of petroleum dealers in the country.The association believes the prices of RON95 and diesel will inevitably be increased progressively.

According to the SMI Association of Malaysia once the government has specified that only those earning RM5,000 and below will be entitled to purchase subsidized fuel, small businesses will be affected.

Some believe the public will better accept the government’s plan if the subsidies saved could be used to improve on existing transportation facilities and development.of new infrastructure.

New fuel subsidy plan will create black market, PKR MP warns Putrajaya

July 26, 2014

So, we’ll buy petrol literally of the back of lorries, eh? I say remove all subsidies, improve and extend bus, LRT, MRT, train and becha services, raise taxi fares (have you seen the taxi fares in Kerteh?), summary execution for errant bus and taxi drivers.

Dateline 2014-06-03, Malay Mail:

Putrajaya’s plan to sell fuel at different subsidised rates to different income groups may create a “black market”, PKR’s Pandan MP Rafizi Ramli said today.

The PKR leader said the government’s bid to limit or deny high-income Malaysians’ access to subsidised fuel could end up creating an illegal trade and result in an abuse of the system among those in the lower-income categories.

“I worry if this new subsidy system is not refined and openly discussed, when it is implemented in the future, it will create a black market for petrol and diesel that will create a new and larger problem than the existing smuggling because it involves even more people and the public,” the outgoing PKR strategic director said in a statement today.

Highest and Cheapest Gasoline Prices by Country

July 20, 2014

dateline 2014-06-02, Bloomberg:


Price per gallon of gasoline: $2.42
Rank by most expensive gas: 54
Rank by pain at the pump: 37

Malaysia’s extensive fuel subsidies give it one of the lowest gas prices in the 61-country ranking.

Cheap gas comes at a cost; despite strong economic growth, Fitch Ratings lowered the country’s credit rating last year. Soon after the rating drop, Prime Minister Najib Rasak cut the fuel subsidy by almost 23 cents a gallon.

Gas prices rose 11 percent since July when priced in Malaysian ringgits.

Reforms in fuel subsidy not expected until after GE

May 2, 2012

Dateline 2012-04-12:

Malaysia’s huge fuel subsidy bill, estimated at RM20 billion last year, is overdue for an overhaul. While reforms are imminent, few expect any of it can happen until the general election (GE) is over.

An indication of how far off we are from real market prices is plainly seen at the pumps.

Last week, the price of the market-driven RON97 petrol blend was increased by 10 sen to RM2.90 a litre. The more widely-used RON95 blend and diesel selling prices were kept at RM1.90 a litre.

It was estimated that the cost of petrol is at least RM2.80 a litre based on the crude oil price of US$120 a barrel.

Minister: RON95 petrol subsidy up 10 sen, pump price unchanged

April 15, 2012

Dateline 2012-03-27:

The government’s subsidy burden for RON95 petrol rose by 10 sen per litre this month due to increasing global oil prices said Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob today to the Star.

He said that the total subsidy per litre is now RM1.03. RON95’s pump price presently is RM1.90 per litre.

Ismail Sabri said the government does not want people to bear the burden.

Last December RON95 pump price was raised 5 sen.

Late last month, Prime Minister Datuk Seri Najib Razak assured Malaysians that RON95’s — which is used by most motorists — present price would be sustained regardless of global oil prices.


From The Star – RON95 Remains Steady

March 11, 2011

Dateline 2011-02-24:

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said here on Thursday that fuel prices would not be raised despite the escalating global oil price.He stressed that the current situation could still be handled without increasing the price of RON95 and diesel in Malaysia, which is now at RM1.90 and RM1.80 per liter.

Meanwhile, the ministry would discuss with the Finance Ministry to work out alternative measures to cushion the increase including increasing government spending on oil subsidy, he said.

You can subscribe to an online version of the paper at the e-browse site.

From Rueters – Malaysian dealers to hike price of premium fuel

November 13, 2010

Anyone else know about this?

Dateline 2010-11-01:

Malaysian petrol dealers said on Monday they will raise the price of the premium grade RON 97 fuel by 5 sen or 2.4 percent to 2.15 ringgit ($0.695) a litre on Tuesday.

“RON 97 has not been subsidised by the government and since world oil prices have gone up, the petrol price gets adjusted,” Hashim Othman, president of the Petroleum Dealers Association of Malaysia, told Reuters.

From The Star – Fuel Pricing by Car Size

January 19, 2010

Do I need to elaborate on this article from The Star deadline 2010-01-08? It should be retitled ‘Fuel Pricing Finally Goes Bananas':

PETALING JAYA: The bigger your car, the more you will have to pay for petrol from May 1.
This is because the Government is going to change the way fuel is subsidised.
It is planning for a fuel pricing mechanism that will ensure only targeted groups, particularly those from the lower-income, will receive fuel subsidy.
Also, foreigners who drive into the country to fill up their tanks will not be eligible for subsidy and will have to pay more for fuel.
“The bigger the engine, the higher petrol will cost,” Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said yesterday.

Don’t get me wrong, I’m all eliminating the fuel subsidy in conjunction with a concerted effort to entice me to use a safe, reliable, efficient, cost effective, redundent public transport system. My dark sense of humor was so tickled by the above article that it shut down for a few minutes for want to address all the things that can go screwy.

If you want some follow up articles, try here, here.

From the Star – Govt may be pressured to review prices of petrol

November 7, 2009

From the Star, dateline 2009-10-23:

Crude oil prices up 15% since start of October

PETALING JAYA: Rising crude oil prices in the international market may up the pressure on the Government to review local pump prices to rein in the country’s huge fuel subsidy bill.

Crude oil yesterday retreated from a high of US$82 per barrel hit in New York overnight, but remained above the US$80 mark during Asian trading hours yesterday.

At the current level, crude oil had surged 15% since the start of October and more than doubled from a low of US$34 per barrel in March.

And just in time for the next general elections.


Crude oil trending - taken from the Star

From the Star – How will you benefit from the new RON95 petrol?

September 23, 2009

Taken from the Star, dateline 2009-03:

PETALING JAYA: RON95 was the buzz at neighbourhood petrol stations as consumers had to quickly grasp the differences between the RON92 (which is discontinued) and RON97 (which has been upgraded) and the new, more environment friendly oil.

The first thing they want to know is how they will benefit from this change to RON95 which retails at RM1.80 per litre.

“About 90% of motorists using RON97 (which has been upgraded to a premium product and sold at a higher price of RM2.05 per lire) can now switch to RON95,” said Domestic Trade, Cooperative and Consumer Affairs Ministry secretary-general Datuk Zain Mohd Dom.

“The price of RM1.80 for RON95 will be capped at this level for the rest of the year,’’ Zain told StarBiz, referring to a statement earlier by Minister Datuk Seri Ismail Sabri Yaakob. “It moves within an active price range, depending on the price trend of oil gauged over a one-month period.”

Malaysia - Petrol Price

Malaysia - Petrol Price


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