Malaysia sets aside RM3b to finance fuel subsidies

[KUALA LUMPUR] Malaysia's government has allocated RM3 billion (S$1 billion) to subsidise pump prices till the end of 2018, the finance ministry said in a statement on Thursday.

The funds will be used to keep prices of RON95 petrol and diesel at fixed prices, while the higher grade RON97 petrol will be floated on a weekly basis.

"The federal government will subsidise 33 sen per litre for all retail purchases of RON95 and diesel for this week," Finance Minister Lim Guan Eng said.

Prime Minister Mahathir Mohamad announced last month plans to reinstate fuel subsidies amid rising oil prices, even as his administration looks to cut national debt that he said had reached RM1 trillion.

Mr Mahathir, 92, led an opposition coalition to a spectacular win over predecessor Najib Razak's previously undefeated ruling alliance in a general election on May 9, having campaigned aggressively over rising living costs and a multi-billion dollar scandal at state fund 1Malaysia Development Berhad (1MDB).

REUTERS