10 March 2011 - The fuel subsidy is estimated to rise by an additional RM4bil this year if no adjustments are made to petrol prices, which stand at RM1.90 per litre for RON 95 and RM2.50 per litre for RON 97. Prime Minister Datuk Seri Najib Tun Razak said at a press conference on Wednesday. The subsidy costs for fuel would rise by this amount if no adjustments were made in the face of higher crude oil prices.
He said that would be an addition to the RM10 billion in subsidies allocated for this year.
"Whether there is a need to adjust petrol prices, it will depend on inflation," he said at a press conference following a Board Briefing from Bank Negara here Wednesday.
"A sharp rise in oil prices because of the uncertainty and developments in the Middle East will be the biggest threat to global economic growth," he said. Najib, who is also Finance Minister, said that the government was committed to the subsidy rationalisation programme but on a gradual basis with the target being the lower and middle income people.
The prime minister also said that the government's deficit would depend on how much revenue the government would get against the increase in subsidy cost particularly if there was no revision in terms of prices of petrol, oil, diesel and other items.
He also said that measures will be taken if energy prices continue to rise above critical point and impact global economic growth. These would include ensuring that domestic demand continued at high level, especially private consumption and investment by the private sector, he said.
"Private sector investment has fallen over the years but with the introduction of the ETP (Economic Transformation Programme) and entry point projects, private sector investment is expected to rise," he said.
"Continuing rising inflation will continue to impact consumers," said Najib. The sovereign debt crisis is still manageable, he said. Najib said at the moment, there was no need for pump priming unless there was a severe global economic recession. "What we are seeing now is moderate lower growth," he said.
Source: Bernama
