Malaysia to cut price of diesel nationwide from July
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
KUALA LUMPUR: Malaysia will lower the price of diesel to RM2.10 (US$0.51) per litre nationwide for its citizens from July after the current difference in prices between subsidised and unsubsidised diesel led to smuggling and revenue losses.
Diesel is currently sold at a subsidised price of RM2.15 per litre in the eastern states of Sabah and Sarawak, compared with RM4.37 in the Malaysian peninsular.
This means that under the new policy, motorists will pay less than half of the current Peninsular Malaysia rate.
Since June 2024, the price of diesel has been floated in Peninsular Malaysia while East Malaysia still enjoys subsidies as diesel-powered 4x4 vehicles are considered a necessity because of the rugged terrain there.
In April, diesel prices hit a new high of RM6.72 per litre in Peninsular Malaysia.
The price gap between diesel sold in Sabah and Sarawak and that in Peninsular Malaysia had created room for revenue leakage and the smuggling of subsidised diesel, including across borders, the finance ministry said in a statement on Sunday (Jun 21).
The ministry did not say how the government planned to finance the additional subsidy, with public coffers already under strain from rising fuel costs stemming from the war in Iran.
Second Finance Minister Amir Hamzah Azizan is expected to announce further details on Monday, it said.
Malaysia has been seeking alternative fuel sources as the Middle East conflict restricts global supplies.
In March, Amir Hamzah had said that the government's fuel subsidy bill is projected to surge over four-fold to about RM3.2 billion per month, up from RM700 million previously, as global oil prices climb amid the escalating Iran war.
Separately on Saturday, national energy firm Petronas, or Petroliam Nasional, announced it had signed several new agreements in Turkmenistan, including collaborations with state companies Turkmennebit and Hazarnebit, to strengthen Petronas' presence in the Caspian Sea and expand its upstream portfolio.
Prime Minister Anwar Ibrahim said the deals would allow Malaysia access to one of the largest gas reserves in the world, and potentially enable it to increase exports to partner countries such as China, Japan and South Korea, according to state news agency Bernama.
Russia has also assured Malaysia of a long-term agreement for the supply of oil, gas and diesel for at least 20 years, Anwar said, without providing further details.
Newsletter
Morning Brief
Subscribe to CNA’s Morning Brief
An automated curation of our top stories to start your day.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app