The retail price of RON 95 new rose from RM2.10 to RM2.30, while diesel from RM2 to RM2.20, effective 12:01 midnight Thursday.
The new prices following the reduction of subsidies for RON 95 petrol and diesel reduced by 20 sen. At this time, the market price of RON95 petrol is RM2.58 per liter, while the price of diesel is, RM2.52 per liter.
Ministry of Home Affairs, Cooperatives and Consumerism Ministry (Ministry) in a statement on Wednesday said that although the subsidy rate is reduced, the government has to spend more than RM21 billion for subsidies for petrol, diesel and LPG for the year 2014.
According to the statement, the measures will be implemented in line with the policy of rationalization of government subsidies to ensure the country's financial position remains strong.
"The government is also expected to reduce leakages and smuggling activities done by those who are not responsible.
"Subsidies should reach the target group and not in bulk. Because foreign tourists also enjoy a subsidy provided by the government," he said.
Ministry said the austerity measures of the petrol and diesel subsidies can result in savings of money and it can be used for the development of education, health, public transport system more efficient and improve national security.
Even so, the government is aware that this subsidy rationalization will affect the economy and society.
"The Government will continue to provide assistance and incentives to ease the burden, especially low and middle income earners.
"Among the measures to be taken by the government is to raise lending rates 1Malaysia People's Aid (BR1M) to be announced in the 2015 Budget time," according to the statement.
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