The petrol price for Ron95 will gradually be increased every week starting from January 2020 as the government subsidy is gradually removed.
- The current Ron95 subsidy program will be removed and replaced with the Targeted Subsidy Program as announced in Budget 2020.
- Weekly price increase of one sen per litre to two sen per litre until Ron95 reaches market price.
- The maximum price cap of RM2.20 per litre on Ron95 will also be removed.
- The float of petrol price will be gradual to ensure prices of goods do not rise dramatically.
- Enforcement action will be taken on profiteering under the Price Control Act 1946.
- The increase will not take effect in Sabah, Sarawak and Labuan with Ron95 price here being maintained at RM2.08 per litre.
Chong Chieng Jen, the deputy minister of domestic trade and consumer affairs has assured that the government will float the price of petrol in stages, increasing it by one or two sen a week until the price of Ron95 reaches the market price.
Change to targeted Ron95 subsidy
A new RM2.2b Targeted Subsidy Programme (Program Subsidi Petrol – PSP) is to take effect from Jan 1, 2020.
Recipients of Bantuan Sara Hidup (BSH) are to get a fuel subsidy of RM120 for car owners (equivalent to RM30 per month) and RM48 (equivalent to RM12 per month) for motor bike owners every four months.
This allowance is only applicable to cars below 1600cc (unless your car is above 10 years old) or motor bikes below 150cc (unless your motor bike is above seven years old).
The last major change in petrol pricing was in January 2019 with weekly fuel float pricing announced every Friday via the Automatic Pricing Mechanism (APM).
Budget 2020 announced that qualified non-BSH motorists will receive Kad95 to enjoy a fuel subsidy of RM0.30 per litre capped at 100 litres for car owners and 40 litres for motorcycles every month.
This article first appeared in MyPF. Follow MyPF to simplify and grow your personal finances on Facebook and Instagram.