Restructuring of fuel subsidy scheme in Malaysia

Malaysia Prime Minister Datuk Seri Abdullah Ahmad Badawi has announced the restructred fuel subsidy schemes today.

Here are the cabinet's decisions on the subsidy of petrol and diesel:

• Effective 5 June 2008, RON97 petrol price rises by 78 sen from RM1.92 to RM2.70 per litre. RON92 petrol price also rises by 78 sen from RM1.88 to RM2.62 per litre.
• At the same time, diesel price also rises by RM1.00 from RM1.58 to RM2.58 per litre.
• For personal vehicles up to 2000 c.c. and also trucks and jeeps up to 2500 c.c., an annual cash rebate of RM625 will be given.
• For motorcycles up to 250 c.c., the annual cash rebate will be RM150.
• The cash rebate will be given from 1 July 2008 onwards in the form of Money Order collectible in Pos Office to road tax renewed within 1 April 2008 and 31 March 2009.
• For personal vehicles above 2000 c.c., there will be a reduction of RM200 in road tax.
• For motorcycles above 250 c.c., the reduction in road tax is RM50.

Other than the above, decisions have also been made which affect the following areas:

• Diesel subsidy for logistic transport, vessels and fishermen.
• Gas price to electricity producers and for industrial usage.
• New electricity tariff effective 1 July 2008: no change for household with monthly bill less than RM43.60, else there will be a 18% residential tariff increase. 26% tariff increase for commercial and industrial regions.
• Windfall tax for Independent Power Producer (IPP) and Palm Oil Producer (POP).
• Effective 1 July 2008m threshold for 5% service tax to restauran outside hotels risen from RM0.5 million to RM3 million.

Click here for the official government announcement.