Even with the removal of blanket subsidy in favour of targeted cash handouts, Malaysia’s new diesel pump price is the still the cheapest in ASEAN except for Brunei.
The finance ministry released the infographic above that compares Malaysia’s new RM3.35 per litre rate with the diesel pump price in our Southeast Asian neighbours, and it’s cheaper than, in descending order, Singapore (RM8.79), Myanmar (RM5.40), Philippines (RM4.75), Cambodia (RM4.64), Laos (RM4.56), Indonesia (RM4.43), Thailand (RM4.24) and Vietnam (RM3.69).
As mentioned, the only country where diesel is sold for lower than RM3.35 is Brunei, the tiny oil-rich sultanate of just 470,910 people. There, the diesel pump price is RM1.09 per litre.
If you haven’t caught up with what happened yesterday (yes, it was announced on a Sunday), the government kicked off its fuel subsidy rationalisation programme by proclaiming that diesel prices in Peninsular Malaysia will be floated, and will retail at RM3.35 per litre starting from today, June 10.
This means that the price of Euro 5 B10 and B20 diesel in Pen Malaysia is now RM1.20 (or 56%) more than the previous capped price of RM2.15, which has been in place since February 2021. While not mentioned in the press statement, the price of Euro 5 B7 – which before this costs 20 sen per litre more – should be adjusted to RM3.55 per litre.
According to finance minister II Datuk Seri Amir Hamzah Azizan, the new retail price of the fuel is based on the automatic pricing mechanism (APM) formula for the month of May. He added that under the targeted diesel subsidy implementation, the government has set diesel fuel prices for eligible sectors as follows:
- Subsidised Diesel Control System (SKDS) 2.0, which provides fleet cards to eligible logistics vehicles to mitigate the impact of the diesel price on consumer goods prices, is set at RM2.15 per litre.
- Subsidised Diesel Control System (SKDS) 1.0 for land public transport, including school buses, express buses, ambulances and fire engines remains at RM1.88 per litre.
- Subsidised diesel for fishermen is maintained at RM1.65 per litre.
The diesel price float move follows on the announcement made by prime minister Datuk Seri Anwar Ibrahim on May 21 that the government was set to implement targeted fuel subsidies, starting with diesel in the peninsula, with that for Sabah and Sarawak to be set aside until later. For now, diesel remains priced at RM2.15 in Sabah, Sarawak and Labuan.
The removal of the blanket subsidy for diesel will see targeted subsidies being dispensed via the Budi Madani assistance programme. Announced on May 27, the programme is open to private owners of diesel-powered vehicles as well as agriculture smallholders in Peninsular Malaysia, with eligible recipients in both categories set to receive RM200 cash a month.
It is worth noting that the RM200 aid will cover the first 167 litres of diesel. If you use any more than that per month, your fuel spend goes up. For a typical diesel pick-up doing around 10 km/l, that works out to an average mileage of 1,670 km per month before the subsidy runs out. Those whose applications for diesel subsidies have been approved by June 3 will soon be receiving their first Budi payment.
Pick-up truck owners, are you OK? RON 95 petrol users, are you ready?
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