Friday, May 28, 2010
Subsidy No More?
UALA LUMPUR, May 27 (Reuters) - Malaysia will hike petrol,
gas and toll highway rates under a five-year plan to cut
subsidies, if to proposals made by PEMANDU, a body advising the
government on how to cut subsidies are enacted.
The government has yet to make a decision on the planned
subsidy cuts and may not do so for some months.
Subsidy cuts proposed involving 12 items:
* Petrol prices to be increased 15 sen in June-Dec 2010, then
10 sen hikes every six months between Jan 2011-Dec 2012 and by a
lesser amount in following years.
* Petrol prices seen at
- 2.16 ringgit in 2011
- 2.20 ringgit in 2012
- 2.34 ringgit in 2013
- 2.52 ringgit in 2014
- 2.60 ringgit in 2015.
* The forecast for crude oil in 2011 is $73.06 per barrel and
for 2013-2015 in the region of $79.41-94.52.
* Renegotiation with PLUS highways in 2010 and with
LDP Highways by 2013. Propose that all concession
agreements would proceed without subsidies, resulting in a toll
hike of between 10-67 percent for 2010.
* Gas price is increased by a fixed rate of RM3/MMBTU every
six months from initial increase for power sector and non-power
* Gas price increase of RM3/MMBTU every six months
corresponds to an increase in electricity tariff of 1.6 sen/kWh
every six months.
* Electricity tariff for lifeline consumers (in 2010, less
than 200 kWh) would not be increased. About 56 percent of
households will not be affected in 2010.
* Consumers with a monthly bill of 20 ringgit and below will
continue to get free electricity until Dec 2010.
* Strategic industries will be protected initially.
* Estimated impact on inflation:
- A 5 percent increase in petrol prices would result in a 0.4
percentaage points rise in the consumer price index.
- A 10 percent increase would cause the CPI to go up by 0.82
percentage points. Fuel represents 7.7 percent of the CPI basket.
* In 2010, government will save about 3.0 billion ringgit. In
2011, 14 billion ringgit, 21 billion rgt in 2012, 29.5 billion
ringgit in 2013 and 35 billion in 2014.
Posted by ivantai at 12:04 PM