According to a report on Malaysiakini, the Malaysian government could hike petrol prices up by this year. The report says that the initial price increase will be 15 cents per liter and implemented this year under plans presented by a body advising the government on how to cut subsidies.
The proposal was made today to urge people to accept higher prices as Malaysia seeks to reduce its budget deficit which stood at a 20-year high of 7 percent of gross domestic product in 2009.
If the proposal goes through, the price of petrol would be hiked some time this year followed by two price hikes totally 20 cents per liter in 2011 and two more of 20 cents per liter in 2012.
In 2013-2015, there will be slow price hikes and by the end of 2015, the price of RON95 would stand at RM2.60 per liter, but the proposal has yet to be approved by the government, so there's no telling whether or not the proposal will be accepted.
The forecasts were based on a crude oil price forecast of US$73.06 per barrel for 2011 and US$79.41-US$94.52 for 2013-2015.
Petrol
Petrol prices to be increased 15 sen in June-Dec 2010, then 10 sen hikes every six months between Jan 2011-Dec 2012 and by a lesser amount in following years.
Petrol prices seen at
2011 - RM2.16
2012 - RM2.20
2013 - RM2.34
2014 - RM2.52
2015 - RM2.60
The forecast for crude oil in 2011 is US$73.06 per barrel and for 2013-2015 in the region of US$79.41-94.52.
Tolls
Renegotiation with PLUS highways in 2010 and with LDP Highways by 2013.
Propose that all concession agreements would proceed without subsidies, resulting in a toll hike of between 10-67 percent for 2010.
Gas
Gas price is increased by a fixed rate of RM3/MMBTU every six months from initial increase for power sector and non-power
sector.
Gas price increase of RM3/MMBTU every six months corresponds to an increase in electricity tariff of 1.6 sen/kWh every six months.
Electricity tariff for lifeline consumers (in 2010, less than 200 kWh) would not be increased. About 56 percent of households will not be affected in 2010.
Consumers with a monthly bill of 20 ringgit and below will continue to get free electricity until Dec 2010.
Strategic industries will be protected initially.
Inflationary impact
* Estimated impact on inflation:
- A 5 percent increase in petrol prices would result in a 0.4 percentaage points rise in the consumer price index.
- A 10 percent increase would cause the CPI to go up by 0.82 percentage points. Fuel represents 7.7 percent of the CPI basket.
Total savings
* In 2010, government will save about RM3 billion. In 2011, RM14 billion, RM21 billion in 2012, RM29.5 billion in 2013 and RM35 billion in 2014.
Source: Reuters via Malaysiakini
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