Petrol to cost RM2.70 from midnight

Effective 5th June 2008 0001 Hour. Malaysia Petrol/Diesel price will be adjusted as following price...

New Price Old Price
RON97 Petrol RM2.70 per liter RM1.92 per liter
RON92 Petrol RM2.62 per liter RM1.88 per liter
Diesel RM2.58 per liter RM1.58 per liter

No word at the moment on how much Shell V-Power will cost. The new price of RM2.70 includes a 30 sen government subsidy from what the Prime Minister says is a market price of RM3.00 per liter.

The government will be giving an additional subsidy of RM625 a year for cars with engine displacements 2000cc and below liters (joy for Mercedes-Benz C200K and E200K owners with their 1.8 liter engines, I suppose), and pick-up trucks with engine capacities up to 2,500cc. Motorcycles under 250cc will get a subsidy of RM150 per year. RM625 is said to be an equivalent of 800 liters a year, which is roughly 78 sen per liter.

Basically for the first 800 liters of fuel used per year, you’ll still be paying the old price of RM1.92 per liter. 66 liters per month is the equivalent of nearly 2 full tanks for a small compact car, or just over 1 full tank for a typical sedan. Payment of the subsidy will be made via postal order to be issued when you renew your car’s road tax annually, and payment processing will begin on the 1st of June 2008.

For those who do not qualify for the subsidy, there is some reduction in road tax prices. For cars with engine displacement of above 2000cc, road tax will be slashed by RM200. Motorcycles above 250cc will have their road tax slashed by RM50.

These changes are only temporary. As mentioned by Datuk Shahrir Samad yesterday, this will only be step one in the final plan in restructuring the way we purchase fuel in our country. These prices are still controlled prices - future prices will be a floating market rate that is not capped by the government.

The government will be moving towards abolishment of the fuel subsidy in the future, so we’d better just get used to these new prices. There is already a hint in the Prime Minister Office’s announcement which states that the cash subsidy will be for vehicles

Sources: paultan.org