Malaysia sets aside 3 billion ringgit to finance fuel subsidies

FILE PHOTO: Malaysia's Finance Minister Lim Guan Eng speaks during a news conference in Putrajaya, Malaysia May 24, 2018. REUTERS/Lai Seng Sin

KUALA LUMPUR (Reuters) - Malaysia’s government has allocated 3 billion ringgit ($760 million) to subsidize 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 gasoline and diesel at fixed prices, while the higher grade RON97 gasoline will be floated on a weekly basis.

“The federal government will subsidize 33 sen per liter 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 1 trillion ringgit.

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).

Reporting by Joseph Sipalan; Editing by Tom Hogue