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Diesel Price Surge to RM3.35/L – What You Need to Know

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Fuel subsidy rationalization by the government has officially taken its first step – diesel is first.

Diesel prices is increased to RM3.35 per litter (from RM2.15), and will subject to weekly reviews. That is a whopping 56% increase!

Why do it?

Targeted diesel subsidy mechanism is expected to save the government about RM4bil a year.

  • Reducing diesel subsidies is seen as an easy way to fix budget issues and make government spending more efficient.

  • Previously, the diesel subsidy was not benefiting the intended recipients. Therefore, the plan is to redirect this money to ensure it reaches the right people.

Will price of goods and services increased?

Most economists in general are staying calm on the potential effect to inflation.

  • Given that diesel carries just 0.2% weight in overall inflation basket, the

    direct impact is likely to be minimal. There should not be any noticeable increase in general prices from the consumer’s perspective.

  • Budi Madani cash assistance of RM200 per month is sufficient to cover private diesel vehicle owners and small-scale farmers / commodity growers.

I am a diesel user. I am affected.

Check out assistance given by the government here https://budimadani.gov.my/.

  • You could get RM200 aid each month, or a fleet card (like your bank card, but only for fuel!)

Do you know?

Malaysia’s diesel prices at RM3.35 per litre still remains the second lowest in ASEAN (after Brunei).

Restructuring for "minyak kuning" RON95 is next - brace yourself!

  • Effects of price hikes for RON95, which carries 5.5% weight in overall inflation basket, will be more significant on inflation and household purchasing power.

  • Rationalisation with RON95 is more complicated because it involves the general public and millions of petrol customers.

  • Government to assess the impact of the diesel subsidy rationalization for at least six months before proceeding with RON95 subsidy cuts.


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