Kopitiam issues notice that price of Kopi is going up becuase of rising diesel price
So, it looks like the domino effect of removing diesel subsidy has started. First it was the tow truck industry raising their prices, since they have to pay more for fuel and now it is the food and beverage industry just like how we predicted earlier.
Here below we share the notice of the Kopi price hike effective 16th July 2024.
In case you were unaware the Malaysian government’s subsidy rationalisation exercise has since been announced that diesel fuel in Peninsula Malaysia will soon be floated at RM 3.35 per litre, starting from midnight on June 10th (Monday).
This new rate for diesel is to be a sharp RM 1.20 per litre rise from the current subsidised retail price of RM 2.15 per litre, which was in place since February 2021. It is worth highlighting here that the existing rate of RM 2.15 per litre will still nevertheless be in place Sabah, Sarawak and Labuan (for the present moment at least).
According to the Finance Minister II Datuk Seri Amir Hamzah, this new retail price of the fuel is based on the automatic pricing mechanism (APM) formula for the month of May. Diesel price will be reviewed every week, with any updates likely announced at the same instance (Wednesday afternoon) as other floated fuels like RON 97 petrol.
The Ministry of Finance currently estimates that 30,000 private diesel vehicle owners from the B40 category will be entitled to this financial assistance. This aid does nevertheless require eligible parties to register for it, with the Ministry of Finance adding that those who apply before the end of June will still be eligible for the cash aid for this month.
In rationalising the removal of these subsidies, the Finance Minister II said the government hopes that this move can reduce diesel smuggling and leakage that undermine and exploit the nation’s resources.
Ministry of Finance figures currently estimates that the consumption of subsidised diesel increased sharply from 6.1 billion litres in 2019 to 10.8 billion litres in 2023, even though the number of diesel vehicles did not increase significantly. This in turn saw government spending on diesel subsidies rising tenfold during that time, from RM 1.4 billion in 2019 to more than RM 14.3 billion in 2023.
