KUALA LUMPUR, Jan 2 — The government has announced that prices for RON95 petrol and diesel will decrease from early January 2019, in line with global crude oil prices. Moving forward, Finance Minister Lim Guan Eng stated that petroleum product prices will be changed monthly while fuel prices will be done weekly from January 2019.
Currently, RON95 is sold at RM2.20 a litre while diesel at RM2.18 per litre. The government has fixed the prices of both fuels since June 7, 2018, as it promised that the prices will not change despite the upward trend in global crude oil prices in 2018.
During the increase of global petroleum product prices this year, the government's total fuel subsidy totalled RM7.14 billion as of November 2018, with a huge chunk (RM5.82 billion) spent from May to November 2018 alone. Now that the recent crude oil price has decreased, the government will be adjusting petroleum product prices including RON95 next year onwards to reflect the current prices.
The Malaysian finance minister also said that due to the monthly automatic pricing mechanism (APM) for fuel prices, the lower fuel prices can only be reflected in the following month.
The switch to a weekly APM system which will be introduced next year will avoid the same problem. Not to forget, the targeted subsidy system to help those in the B40 category will be introduced later on in 2019.
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