Savings From Fuel Subsidy To Go Towards Development

KUALA LUMPUR, Feb 28 (Bernama) - The estimated RM4.4 billion savings this year from fuel subsidy following the 30-sen rise in fuel prices, Tuesday will be used for national development, particularly to improve the public transportation sector, Prime Minister Datuk Seri Abdullah Ahmad Badawi said Tuesday.

The savings from the subsidy would be spent in the interests of the people, he said.

"The 30-sen increase in fuel prices is reasonable," he told reporters after attending a briefing at Bank Negara, here.

He said fuel prices in the country were still low compared to those in the other Asean member countries except Brunei.

Abdullah said the government raised fuel prices so that the savings from the fuel subsidy could be used to bring development benefits to the people.

Monday, the government announced an increase in the prices of petrol and petroleum products by 30 sen a litre effective today. RON 97 petrol now costs RM1.92 a litre, diesel RM1.581 a litre and LPG RM1.75 a kg.

Asked why domestic prices of fuel were raised when the world price of oil was currently stable, Abdullah said: "The world price of oil has stabilised at a high price."

Asked why the government did not raise fuel prices in stages, the prime minister said that would cause the prices of goods to go up continuously and burden the people.

He also said that the government would monitor the prices of goods that might go up following the rise in the fuel prices.

Abdullah explained that much of the fuel subsidy was enjoyed by those people who owned many cars as well as big cars. Those from the low- and medium-income group who use motorcycles and small cars enjoyed less of the subsidy, he said.

Abdullah reiterated the government's position of not utilising the national income derived from oil revenue garnered by Petronas in subsidising domestic fuel prices.

He said the income from Petronas was used for national development and investments of the national oil corporation. Saying he realised that the people were unhappy over fuel price increases, Abdullah said the people must understand that the government was not withdrawing all of the fuel subsidy but only a part of it.

Without any subsidy, he said, the price of petrol might be more than RM2.50 a litre.

Abdullah reiterated the government's assurance that there would be no more fuel price increase this year.

He advised the people to exercise thrift and, if possible, to car pool.

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Savings From Fuel Subsidy To Go Towards Development

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