The government will review the fuel subsidy if oil prices reaches between US$110 and US$120 per barrel, says Deputy Finance Minister Donald Lim.

The government yesterday decided to maintain the prices of RON95 petrol, diesel and liquefied petroleum gas (LPG) for the time-being.

"We know at this juncture, a lot of other things have also increased, including food prices and housing. So the government decided not to increase (fuel prices)," he told reporters after opening Standard Financial Planner Sdn Bhd's new office in Petaling Jaya today.

azlan Besides, the decision was also based on declining oil prices from US$110 per barrel, as of April, to just above US$100 per barrel, at present, Lim said, adding that the government was closely monitoring the crude oil market.

He however did not specify the brand of crude.

Lim said if oil prices continued to spiral, the government would have to spend more on subsidies, which in turn, could lead to a higher deficit and affect economic growth.

"When we (the government) planned the budget for this year, we were looking at oil prices hovering between US$85 and US$90 per barrel.

"Of course if it (oil price) drops below US$100 per barrel, then the government is not likely do anything because we can still find ways to overcome it.

"But if it goes beyond US$110, then we have to consider (some measures) as it could affect economic growth," Lim said.

NEC to meet to decise on power tariffs

Although, people can continue enjoying the fuel subsidy, Lim also advised them to be prudent.

mca welcoming dinner for central delegates 091009 donald lim Brent crude held steady around US$115 a barrel on Thursday due to a softer dollar and as an unexpected drop in US distillate stocks overshadowed gains in gasoline and crude inventories.

US crude for July delivery rose 38 cents to US$101.70 by 0042 GMT, adding to a US$1.73 gain on Wednesday.

Asked whether there could be an increase in electricity tariff rates, Lim said the National Economic Council would meet tomorrow to discuss and decide on the issue.

On Malaysia's economic outlook in the second quarter, Lim believed the country would be able to register a better growth of 4.6 per cent amid rising foreign direct investments.

- Bernama