Well, it looks like petrol prices are about to go up again this year
Buckle up folks, as it seems that by the end of this year, we may see a hike in petrol prices, particularly RON95 petrol, which, up to this point, is much more subsidised than its counterpart RON97 but if reports are to be believed, diesel and RON95 prices are set to see an increase in the not so distant future.
It has been reported that the subsidy ceiling for both RON95 petrol and diesel, which are currently set at RM2.05 and RM2.15 per litre respectively, may be reviewed again and potentially even increased gradually, in stages later this year which means we could see an increase in petrol prices again by the end of the year.
Moreover, PublicInvest Research analyst, Sabrina Edora, also said the actual price of RON95 is expected to reach about RM3.22 per liter if there is no petrol subsidy compared to the current RM2.05 per litre. Yikes, imagine how much more Malaysian motorists will have to spend if the petrol prices actually reach this figure.
Sabrina Edora also stated in one of her research notes, “Furthermore, we also estimate that the elimination of petrol subsidies for the T20 income group will increase inflation by an additional 0.45 to 0.75 percentage points annually.”
The Consumer Price Index (CPI) also recorded a slower growth rate of only 3.3 percent in April 2023 as compared to 3.4 percent in March 2023, in line with market expectations, while the inflation rate also rose slower at 3.6 percent in April, as compared to 3.8 percent in March.
On top of that, PublicInvest Research also expects the inflation rate across the entire country will likely average between 3.0 percent and 3.5 percent in 2023, with the caveat that any amendment to the retail petrol price cap or the implementation of any price control measures may affect the projection.
While Bank Negara Malaysia (BNM) expected the inflation rate to be anywhere between 2.8 percent and 3.8 percent in 2023 so we are still within the projected rate. Sabrina commented further stating that the overall inflation rate showed a downward trajectory in recent months and that this was mainly driven by various cost factors.
She concluded by stating that although the situation is generally easing, core inflation remains at a high rate due to strong demand. She added that the inflation outlook is prone to significant risks and remains vulnerable to potential changes in domestic policies related to subsidies and controls, prices, as well as developments in financial markets and global commodity prices.
We got all this from Bulletin TV3 and their full article is linked here. Thank you Bulletin TV3 for the information.
