Malaysia to cut fuel subsidies to shore up finances


Anyone know which petrol station is shown in the photo? This must be one of the more popular photopics.

Dateline 2014-10-21, Gulf Times:

Malaysia will abolish subsidies for petrol and diesel from December 1, the government said yesterday, taking a bold step that could potentially save the government some 20bn ringgit ($5.97bn) annually.

Malaysia joins Indonesia and India in cutting fuel subsidies amid a sharp decline in oil prices, ending decades-long policies of cheap fuel that have contributed to fiscal deficits.

Prime Minister Najib Razak has pledged to beef up Malaysia’s public finances by cutting expenditure and subsidies, as well as expanding the tax base by implementing a 6% goods and services tax from April next year.

The price of the widely used RON95 grade of petrol and diesel will be fixed according to an automatic managed float – a system that adjusts prices according to the market rate, the same mechanism as for the price of premium petrol RON97, the Domestic Trade, Cooperatives and Consumerism Minister Hasan Malek said yesterday.

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