The government is absorbing the 10 fold in petrol, diesel, and liquified gas price to the tune of RM2 billion in January following the increase in prices due to the Russian-Ukraine conflict said Finance Minister, Tengku Zafrul.
Zafrul expects the subsidy to hit RM28 billion from RM11 billion in 2021 if the price remains above US$100 throughout the year, the current crude oil price is at US$113. Malaysia despite being an oil-producing nation will be susceptible to price hikes as the country heavily subsidises local consumption of the commodity.
Based on the weekly retail pricing of petroleum products using the Automatic Pricing Mechanism (APM) formula, the retail prices of petroleum products from 10 March 2022 to 16 March 2022 were fixed with the retail price of RON97 was increased by 30 sen from RM3.45 per litre to RM3.75 per litre while the retail price of RON95 petrol was kept unchanged at RM2.05 per litre; and the retail price of diesel remains unchanged at RM2.15 per litre.
These prices were all heavily subsidised as global prices have already surpassed normal acceptance levels, in the United Kingdom a litre of petrol is above 2 pounds (RM10) and 2 Euro in Germany.
