Government to spend additional RM 4.22 billion on fuel subsidies this year due to rising global oil prices

The government has said that an additional RM4.22 billion is expected to be spent this year on fuel subsidies due to rising global oil prices, Malaysian mail reports. The amount will be used to maintain the price ceilings that have been set for gasoline, diesel, liquefied petroleum gas (LPG) and RON 95 cooking oil, said Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz .

Currently, RON 95 has a ceiling price of RM2.05 per liter, while diesel is RM2.15 per liter, with the ceiling prices for both having been revised on February 10 of this year. As for LPG, its price of RM 1.90 per kg has been in place since June 2015, while that of cooking oil (RM 2.50 per 1 kg package) remains the one set in 1997.

In a statement released yesterday, he said the government remains committed to maintaining those price caps. “The government is prepared to bear this increased expenditure on subsidies to maintain the well-being of the population and the continuity of businesses, especially small traders,” he said.

“A total of 3.78 billion ringgit has been allocated for the year 2021, but based on current world market prices, the government is expected to accept subsidies of up to 8 billion ringgit, or 4.22 billion ringgit. more than the initial allowance. he added.

In 2019, the government spent 6.32 billion ringgit on grants, but that figure fell to 2.16 billion ringgit last year. The reduction in spending was due to the significant drop in world crude oil prices following an “oil war” between oil-producing countries, which saw the price of a barrel fall below US $ 20 to a low. given time in April of last year.

Prices at the pump also fell to RM 1.25 per liter for RON 95 and RM 1.46 for diesel that month, and the lack of fuel consumption last year also had a lot to do with the reduction in subsidies.

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