KUALA LUMPUR, Feb 22 — The Najib administration has admitted difficulty in keeping the current pump price as rising global oil prices caused by protests in North Africa could cost an extra RM4 billion in subsidies this year.
Domestic Trade, Co-operatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said today the government was committed to keeping the current price as it did not want to burden the people.
Only RON 97 petrol is priced according to a market float in the country while RON 95 petrol, diesel and gas are subsidised.
“Hopefully not anytime soon,” Ismail Sabri (picture) said when launching a modernisation programme for automotive workshops for the country.
“The government hopes to buffer as much as possible the impact of the global price increase,” he added.
He said the Finance Ministry was looking at several options, including increasing oil subsidies, to ensure people are not affected by rising crude prices which leapt by US$2 per barrel today to breach the US$100 a barrel mark for Brent crude.
But he warned that the government would be further burdened if it chose to increase oil subsidies.
“Oil subsidies cost the government RM10 billion last year. This will increase to RM14 billion if the government subsidies oil further.
“That RM4 billion can be spent for something else,” Ismail Sabri said.
Reuters news agency reported that Brent crude oil futures rose by more than US$2 to as high as US$108.18 per barrel from the previous close on continued fears that violence in Libya could lead to wider supply disruptions from the Opec country.
Brent crude for April delivery stood at US$107.52 per barrel at 0110 GMT. It hit a 2½-year high yesterday for any nearby month of US$108.70.
Spreading unrest in Libya shut down 6 per cent of oil output in Africa’s No. 3 producer yesterday and prompted a number of energy companies to pull out international staff, sending Brent oil prices above US$105 a barrel. - Malaysian Insider
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