RON 97 Fuel Price Increases Again in Malaysia

The price of premium petrol RON 97 has been increased by RM 0.20 sen to a record high RM2.90 per litre as of today.

Datuk Hashim Othman, the Malaysian Petrol Dealers Association president, said the price was increased effective at midnight yesterday. He mentioned that the recent occurrences of global natural disasters and the political instability in the Middle East had caused an increase in crude oil prices. Hashim also mentioned that crude oil prices have dipped slightly after the United States announced the death of terrorist Osama bin Laden.

Hashim said : “The price of RON 97 currently fluctuates as the Government has lifted the subsidy for this petrol, the price of RON 97 might go down in the future, but that depends on the political situation in the Middle East, natural disasters will also affect the price.”

Hashim, however, added that the price of RON 95, which is subsidised by the Governemnt, would stay at RM1.90 per litre.

Last month, deputy finance minister Datuk Donald Lim Siang Chai revealed to the Malaysian Parliament that the Government had spent RM23.1 billion on oil subsidies in 2010 compared with RM33.2 billion in 2008.

The last increase was on April 2nd when the Government raised the price to RM2.70 from RM 2.50, this latest increase being the fifth since the Government announced that it would no longer subsidise RON 97 fuel.

Although the price of crude oil has slightly dipped, some analysts are still predicting future prices to hit USD125 a barrel before the end of the year, whilst others are pointing at lower demand at America’s fuel pumps, which dropped by one percent last month, will see a further decrease into the USD106/107 per barrel range this month. Even if crude oil prices do drop, I wouldn’t expect to see that translate into lower fuel prices in Malaysia.