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‘Govt should subsidise RON97 instead’

 | June 7, 2012

A government subsidy of the higher quality RON97, instead of RON95, would not only save money for the government but also allow consumers to use better fuel for cheaper price.

PETALING JAYA: A PKR leader today took the government to task, alleging that the lower grade RON95 petrol, which is subsidised by the government, in fact costs more than the higher standard, unsubsidised RON97.

Claiming that the government was cheating the people, Malacca PKR vice-president G Rajendran blamed the situation on Prime Minister Najib Tun Razak, who is also finance minister.

“Currently, RON 95 is sold for RM1.90 per litre. The government subsidises RM1.63 for the petrol while the user pays RM1.90 a litre. So in total, RON95 costs RM3.53 a litre.

“But the higher grade RON97 is only RM2.80 per litre based on global oil price mechanism.

‘How did this happen? Despite its low quality, RON95 is more expensive than RON97. Something is not right in this equation. Someone needs to explain this discrepancy,” he told FMT.

He was commenting on the announcement by the government yesterday that the retail price of RON97 would cost 10 sen less and be retailed at RM2.80 a litre starting today.

In announcing the price reduction, the government said the lowered price was in line with the dip in average global crude oil prices in May.

Rajendran said the price reduction of RON 97 was just a political gimmick to shore up support for the BN.

“The government should subsidise RON97, so the price of good quality petrol would be lower than RON95… why subsidise low quality petrol?” he asked.

“If the government gives RM1.50 subsidy for the RON97 petrol, the retail price would fall to RM1.30 per litre. Consumers would use high quality petrol for just RM1.30 per litre. Currently, we are paying RM1.90 for a lower quality RON95 petrol.”

“In fact, the government would be able to reduce subsidy by 13 sen. It now pays RM1.63 in subsidy. With this proposal, the subsidy is only RM1.50,” he added.


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