|Queue at petrol station in Georgetown, Penang - The Star|
Prime Minister Datuk Seri Najib Tun Razak announced the decision, saying that it would save the Government RM1.1bil from September to December this year and RM3.3bil annually. Before the price hike, the Government subsidy was 83 sen for each litre of RON95 petrol and RM1 for a litre of diesel.
Today the price of RON97 has also been increased - by 15 sen. The new rate is now RM2.85 a litre. The price of RON97 peaked at RM3 per litre in September last year.
The retail price of RON97 petrol is determined by a 'managed float' in which the price fluctuates according to market forces.
Prices of goods and services are expected to increase though eateries are allowed to increase food prices by only 0.1%. However, expect bus fares to go up by between 5% and 30% ‘in the near future’.