The federal government has said that the issue of reducing oil prices in tandem with plummeting global crude oil prices “does not arise” as the government is still subsidising RON 95 petrol and diesel prices in the country.

Deputy Finance Minister Ahmad Maslan, in responding to the urgings by several opposition lawmakers, said that the government is still paying a 12 sen subsidy per litre for the fuel in this country.

However, this is significantly reduced from the 74 sen per litre subsidy the government was handing out in 2013.

“If the fuel prices continues to plummet, the government has two options - to reduce prices or to start charging sales tax on fuel,” he said.

He said that there is supposed to be 58 sen tax on every litre of fuel sold.

However, Ahmad Maslan said that the government “hopes” for a further oil price reduction as a reduction of fuel prices would mean a reduction in prices of goods.

As to questions on why Malaysia has to increase the price of fuel when it is an oil-producing country, he said that it is more profitable for Malaysia’s oil to be sold to foreign countries.

“So we import oil from Middle Eastern countries, which is cheaper, to be used in Malaysia,” he said.

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