PUTRAJAYA: The retail price of petroleum products including RON95 petrol will be cheaper from Jan 1 onwards.
Finance Minister Lim Guan Eng said this follows the move by the government to streamline the price of petroleum product prices on a monthly basis, in line with the global market price of crude oil.
He said the move would prove to be more beneficial to consumers.
Lim also announced that the government would be returning to a weekly float for the RON95 petrol price from Jan 1 onwards.
He said if global oil prices were to increase weekly, the rise in retail oil prices would be controlled and limited to RM2.20 per litre for RON95 and RM2.18 for diesel.
“In line with the current oil market price decline, the government will adjust the retail price of petroleum products including RON95 to lower prices from January 1, 2019 onwards.
“This as the retail prices of petrol products are done through on a monthly basis,” he said in a statement here.
Lim said the government currently sets fuel prices on a monthly average basis, which will only be reflected the following month.
He said the price of petrol is determined based on the formula of Automatic Pricing Mechanism which takes into account the average cost of processed petroleum products, according to reference of Mean of Platts Singapore and foreign exchange rates in the previous month.
“In this matter, the changes in the price of fuel in Dec 2018 will only result in a reduction in fuel prices in Jan 2019,” he said.
"This is in line with the 14th General Election manifesto which called for the people to benefit and ensure their wellbeing from lower oil prices but at the same time help those in the B40 category when the oil prices increase.
"For the non-target group, the retail price of RON95 petrol will be floated to reduce government subsidies. This is in line with the subsidy's intent in that it should benefit the target group especially those in the lower income bracket," he said.
Lim also revealed that the government had incurred a subsidy cost of RM7.14 billion until Nov 2018.
This follows subsidies cost incurred between May to Nov 2018 amounting to RM5.82 billion, due to the resumption of RON95 petrol and diesel retail prices at RM2.20 per litre and RM2.18 per litre, despite global market price of petroleum products rising during that period.
In the 2019 Budget, the government had announced its revised fuel subsidy system, offering a cheaper price for RON95 petrol to cars with an engine capacity of below 1,500cc and motorcycles with a capacity below 125cc starting the second quarter of 2019.
Eligible cars can receive the subsidy of up to 100 litres per month, and 40 litres per month for eligible motorcycles. The roll-out of this subsidy system has yet to be finalised.
Meanwhile, Lim denied allegation by former prime minister Datuk Seri Najib Razak that the government imposed a sales tax of 30 sen per litre on RON95 petrol since Nov.
He also said the allegation that the government collected a sales tax of RM129 million per week on RON95 petrol was false.
"His (current) allegation is similar to that of his previous claim that 1MDB has benefited Malaysia, when the world knows that 1MDB is the largest corruption scandal in history that has saddled Malaysia with federal government debt of more than RM1 trillion." he added.