By Shannon TeohKUALA LUMPUR, Nov 18 — Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad revealed today the government has stopped subsidising fuel since Nov 1 and been collecting taxes instead on all fuel sales.
Speaking to reporters in Parliament, he explained that even after the 15-sen drop today, which saw RON97 petrol dropping to RM2 per litre, and RON92 and diesel down to RM1.90, the government was no longer subsidising fuel at the pumps.
"Even if prices return to RM1.92, we will still have a bit of surplus," he said, adding that subsidies had disappeared once the global price of fuel had dipped under US$65 per barrel.
Current prices are hovering at US$55 per barrel.
Current prices are hovering at US$55 per barrel.
This gels with the 2009 Budget winding-up speech by Finance Minister Datuk Seri Najib Razak where he claimed a projected RM7 billion savings in fuel subsidies will be utilised to stimulate the troubled economy.
The statement was puzzling as the government had earlier said it would maintain a 30-sen fuel subsidy to keep pump prices below market prices.
As fuel companies take a 19-sen cut and fuel station operators take 12 sen, it can be inferredthat the cost price of RON97 petrol is currently below RM1.61 if the government can still collect taxes at RM1.92.
Shahrir, however, explained that this did not mean that the people were not being helped by the government.
"We are still giving the RM625 road tax rebate for cars and RM150 for motorbikes that goes straight into your pocket," he said, referring to the rebate announced when RON97 shot up to RM2.70.
"So the rebate is for when the people suffered for about three months," he said.
The Johor Baru MP had called a press conference to announce that a total cost of RM21.4 billion had been incurred by the government up to October this year due to tax exemptions and subsidies for fuel against RM16.2 billion last year.
He also said that government would consider a floor price for fuel. -- The Malaysian Insider
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