KUALA LUMPUR (March 25): The government is planning to cut the standard monthly entitlement for subsidised RON95 petrol under the Budi95 programme, after non-subsidised fuel prices jumped again with no let-up in the Iran war.
Sources told The Edge that the current 300-litre quota will be reduced to 200 litres per month, with the announcement likely to be made as early as this week. The new quota for the subsidised fuel, priced at RM1.99 per litre, is expected to take effect from April.
This means that once the 200-litre limit is exceeded, consumers will be subject to the market-determined floating price. That rate is set to surge by 60 sen per litre to RM3.87 starting Thursday (March 26 till April 1), up from the current RM3.27. Unsubsidised RON95 has been raised twice since March 11, rising a cumulative RM1.20 or 44.94% from RM2.67.
By Thursday, retail prices for RON97 and diesel in Peninsular Malaysia will have recorded three consecutive weeks of sharp price hikes. The pump price for RON97 is set to jump to RM5.15 per litre — marking a total increase of RM1.90 or 58.46% since March 11, when it was trading at RM3.25 — while Peninsular diesel will be hiked to RM5.52, representing an increase of RM2.40 or 76.92% over the same period, from RM3.12.
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The quota tightening is seen as a necessary fiscal move as the Ministry of Finance grapples with a subsidy bill that Prime Minister Datuk Seri Anwar Ibrahim recently warned could hit RM24 billion this year if global crude remains above US$110 per barrel.
At the time of writing, Brent crude, which surged to nearly US$120 per barrel just over two weeks ago on March 9, has eased to US$94.49 per barrel, still up over 33% from US$70.84 on Feb 26, before the war erupted.