Lab proposes an increase of 10 sen every six months until 2014

The Star Online, Friday 28,2010

KUALA LUMPUR: Fuel prices could increase as soon as next month if a proposal by the Subsidy Rationalisation Lab is to be implemented.

The lab, organised by Performance Manage­ment and Delivery Unit, recommended that fuel price be increased by 10 sen to 15 sen by the middle of the year to help realise the Government’s plan to cut its subsidy bill.

Following the initial increase, the lab proposed an increase of 10 sen every six months until 2014, by which time the level is expected to have reached market price.

To help mitigate the effects of the price hike, owners of cars with an engine capacity below 1,000cc will get a cash rebate of RM126 per year.

Owners of motorcycles below 250cc will get a rebate of RM54 a year.

Using this formula, the Government will save RM44.9bil in five years.

According to a simulation conducted by the lab, the impact of the price hike would be minimal.

It found that the diesel price hike of 15% or 21 sen would result in express bus fares increasing by one sen to 1.5 sen a kilometre.

The same quantum of increase would raise stage bus fares by 1.4 sen to 50 sen a kilometre, and school bus fares by one sen to 58 sen a kilometre.

For cooking gas or liquefied petroleum gas, the lab proposed a 10% increase by the middle of the year, followed by a 20% increase every year.

The lab projected that an increase of 15% in the price of gas would raise prices of food such as roti canai, nasi lemak, teh tarik and mee goreng by only one to four sen.

On healthcare, the lab proposed that the charge for outpatient treatment at public clinics and hospitals be increased from RM1 to RM3.

For in-patient treatment, the cost will be doubled to RM160 for Class One wards, RM40 (Class Two) and RM6 (Class Three).

Those whose household income is under RM2,160 or categorised under the Fees Act will still enjoy fee exemption.

It also proposed that from 2013, patients pay a percentage of their in-patient cost instead of the current flat rate, and from 2015, patients are to pay a percentage of their outpatient treatment and medication.

Malaysia petrol prices could rise initial 15sen/ltr

Wed May 26, 2010 9:04pm EDT

KUALA LUMPUR, May 27 (Reuters) - Malaysia's government could hike petrol prices by an initial 15 sen (Malaysian cents) per litre from their current price at some stage this year under plans presented by a body advising the government on how to cut subsidies.

The benchmark RON 95 grade currently costs 1.80 ringgit ($0.543) per litre.

The proposals were made in a public presentation on Thursday to win over voters to accepting higher prices as Malaysia seeks to reduce its budget deficit which stood at a 20-year high of 7 percent of gross domestic product in 2009.

Under the proposals presented by the advisory body, the price of petrol would be hiked some time this year followed by two price hikes totalling 20 sen per litre in 2011 and two more of 20 sen per litre in 2012.

In 2013-2015, the price hikes would slow and by the end of 2015, the price of RON95 would stand at 2.60 ringgit per litre, according to the plans that have yet to be approved by the government.

The forecasts were based on a crude oil price forecast of $73.06 per barrel for 2011 and $79.41-$94.52 for 2013-2015.