Diesel prices jump 56% as Malaysia revamps decades-old fuel subsidies
Diesel price in Malaysia have jumped by more than 50%, as part of a revamp of decades-old fuel subsidies to tighten government spending and save billions of ringgit annually
KUALA LUMPUR, Malaysia — Diesel price in Malaysia jumped by more than 50% on Monday as part of a revamp of decades-old fuel subsidies to tighten government spending and save billions of ringgits annually.
The restructuring eliminates blanket energy subsidies and redirects them to the needy. They're part of economic reforms pledged by Prime Minister Anwar Ibrahim, whose government says they're needed to build a more sustainable economy and plug losses from smuggling cheap oil to neighboring countries.
The plan is bold but risky for Anwar, who took power in 2022, as it may anger working-class voters struggling with rising cost of living. He announced the unpopular decision to cut fuel subsidies last month to give time to lower-income groups to prepare for the transition.
«All prime ministers before this had agreed on the targeted subsidy, but there was no political will to implement it because of the risks involved. However, to save the country, we have no choice,” Anwar, who is also Finance Minister, was quoted as saying Monday by national Bernama news agency.
The government eventually plans to follow suit with gasoline subsidies. Essentials including fuel, cooking oil and rice are heavily subsidized in Malaysia which have strained national finances for years.
Second Finance Minister Amir Hamzah Azizan announced Sunday that diesel price will rise to 3.35 ringgit ($0.71) a liter on Monday, up 56% from its previous subsidized price of 2.15 ringgit ($0.46). He said the price will be reviewed on a weekly basis to be aligned with market prices.
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