Friday, September 6, 2013

Malaysia Fuel Price Hike 2013 – GEC Business Review

by Kelvin Wong

The recent fuel subsidy cut announced by the Malaysian Government will have little impact on high cost of living and intense business environment ensued from the anticipated inflation.

According to official forecasts, the increase in fuel prices could boost full-year inflation for 2013 by 0.3%, and food prices by 0.1%.

However, Malaysians are not convinced as they worry that more expensive petrol and diesel will mean having to pay more for goods and services.
Malaysia raised fuel prices for the first time since 2010, joining neighboring Indonesia in curbing subsidies that have stretched government budgets and threatened investor confidence.

The price of the widely used RON 95 grade of gasoline rose 20 sen to 2.10 ringgit ($0.64) a liter after Prime Minister Najib Razak announced the change yesterday in Putrajaya, outside of Kuala Lumpur. Diesel was put up 20 sen to 2 ringgit a liter. The increases will help the government save about 1.1 billion ringgit this year and 3.3 billion ringgit annually in future by reducing state subsidies, he said.

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