PUTRAJAYA: The government will step in to take appropriate measures to reduce the impact of rising fuel prices if the retail price of RON95 and diesel exceeds RM2.50 per litre continuously for three months.
“Based on current trends in rising of world crude oil prices, suitable measures will be taken to mitigate the impact. The measures taken will ensure that the people are not burdened. The move will also control the inflation rate in the medium and long run,” the Finance Ministry said in a statement.
The prices of RON95 and RON97 petrol are currently RM2.38 per litre and RM2.66 per litre, respectively, while diesel is retailing at RM2.25 per litre.
The federal government said it understood the effect of the rise in global oil prices that has exceeded US$60 per barrel now, the ministry said.
“The government’s move to rationalise fuel subsidies based on the increase or decrease of world crude oil prices has successfully reduced leakages and allowed targeted subsidies to be given,” it said.
The ministry also said the retail price for RON95 petrol and diesel takes into account both global crude oil prices and currency exchange rates.
“Currently, the mechanism to determine prices is based on a weekly system of which the average changes in the cost of petroleum products the week before will determine the price in the following week.
“If the price of global crude oil increases, the retail price of petroleum products will increase and vice versa,” it added.
The ministry said the government was still providing subsidies for the public transport sector and fishermen, as well as for Liquefied Petroleum Gas (LPG) or cooking gas.
Fuel prices have been on the rise trend for five consecutive weeks.
Prime Minister Datuk Seri Najib Razak chaired the National Economic Council today, with Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi saying yesterday that the agenda for the meeting included a discussion on options to deal with the recent fuel price hikes.