Here's Why You Shouldn't Have Been Surprised By The Petrol Price Hike

The petrol subsidy cut of 20 sen starting 2 October caught many Malaysians by surprise when it should have been expected.

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Don't Worry, Budget 2015 Will Ease The Pain Of Petrol Price Hike, Says Minister

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek.

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Be patient! That is the message Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek is putting across as Malaysians grapple with the latest fuel price increase. He indicated that there were goodies in store under Budget 2015 that would help offset this.

“It is a very minimal hike in petrol price. Wait for the budget. It will address the burden by increasing BR1M and other measures,” he said. “Be patient — I am confident the budget will stick to the motto of ‘rakyat didahulukan’ (the people come first).

Speaking to reporters today, he said this would include an increase in the amount of the 1Malaysia People's Aid (BR1M), school aid, subsidised house prices and other tax incentives.

"The government has assured that with the increase in fuel price, the people's burden will be considered. Therefore, we appeal to the people to be patient and take it positively. In addition, wait for the prime minister's Budget announcement as there will be several measures to ease the people's burden," he said after launching the Intellectual Property Awards here.

Speaking to reporters after launching the Malaysian Intellectual Property Awards here, Hasan also gave the assurance that his ministry would be on “24-hour call” to ensure nobody raised the prices of goods and services unfairly. “Don’t fool around with our ministry. We will not hesitate to take stern action,” he warned.

The Price Of RON95 Increased By 20 Sen Per Litre Effective 12am This Morning, 2 October 2014

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Putrajaya announced today it is cutting subsidies for the RON95 petrol and diesel by 20 sen per litre from October 2, effectively hiking the fuel at the pumps after midnight tonight.

RON95 Petrol Now Costs RM2.30 Per Litre While Diesel Costs RM2.20 Per Litre

The new retail price of RON95 petrol will be RM2.30 per litre while diesel will be RM2.20 per litre, the Domestic Trade, Cooperative and Consumerism Ministry said in a statement. Currently the market price for RON95 petrol is at RM2.58 per litre, while the market price of diesel is RM2.52 a litre, the ministry said.

Immediately After The Announcement, Motorists Rushed To Fill Their Fuel Tanks Before The New Rates Are Applied

Malaysians were willing to queue for up to 30 minutes to fill their fuel tanks, following news that prices for RON95 petrol and diesel would increase by 20 sen from Thursday. During The Star Online's visit to petrol stations around the area, people were seen rushing to fill up their petrol tanks before midnight.

Petrol Stations Nationwide Suffered Long Queues; Some Motorists Were Willing To Wait For Up To 30 Mins For Their Turn

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The Domestic Trade, Cooperative and Consumerism Ministry Said This Petrol Subsidy Cut Was In Line With The Subsidy Rationalisation Policy

The ministry said the cut in petrol and fuel subsidies were in line with the federal government’s subsidy rationalisation policy to ensure the country’s financial status remains strong.

It also said the government is looking to trim its fiscal deficit in stages as it has been doing since last year, from 3.9 per cent of the GDP to 3.5 per cent this year, and 3.0 per cent in 2015. The ministry said the government hopes to balance its budget by 2020.

The ministry also said the move is aimed at preventing fuel smuggling to ensure the current subsidies of the commodity is not abused by irresponsible parties.

"Despite The Increase, The Government Will Still Need To Spend More Than RM21 Billion On Fuel RON95, Diesel And LPG Subsidies For This Year."

Despite the cut in subsidy, the government would still need to spend more than RM21 billion on RON95, diesel and liquefied petroleum gas subsidies for this year.

The ministry said the government is aware of the impact the subsidy cuts will have on the economy and the people, and will be taking steps to lighten the burden. Among the financial aids will be an increase in the Bantuan Rakyat 1 Malaysia BR1M cash handouts to low-income households, which the ministry said will be announced during the tabling of the 2015 Budget later this month. Other measures the people can look forward to include aid for families with school-going children as well as tax incentives.

There Was No Surprise That A Petrol Price Hike Was Impending. Analysts Had Been Warning Of Another Round Of Subsidy Cuts After The Last Price Increase.

Another round of mid-year petrol price hikes is inevitable, economists say, if the government is to meet its 2014 Budget promise to cut RM7.3 billion or 16 percent in spending on subsidies this year.

"We anticipate further reduction in petrol subsidy in mid-2014 in line with the government’s subsidy rationalisation plans," AmResearch economist Patricia Oh Swee Ling said on 23 May 2014 , reiterating similar statements made in March.

The Last Petrol Price Increase Was On 5 September 2013, Weeks Before The Tabling Of Budget 2014. Since There, There Had Been Numerous Rumours Of Another Price Hike.

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Today's Price Hike Felt Like Deja Vu As Budget 2015 Is Scheduled To Be Tabled On 10 October 2014

Budget 2015 will be tabled on 10 October 2014.

What's Next? Will Petrol And Diesel Be Subjected To GST? How Will This Further Increase Our Cost Of Living? All Eyes Are Now On Budget 2015.

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