The price of petrol, diesel and gas will increase by five cents per litre beginning tomorrow, the Domestic Trade and Consumer Affairs Ministry announced today.

Petrol will now cost RM1.42 per litre for premium grade (RON97) and RM1.38 for regular grade (RON92) at our gas stations.

For Sabah and Sarawak, the price of RON97 is RM1.40 and RM1.41 respectively, while RON92 is the same as Peninsular Malaysia's.

Petrol prices last went up four months ago - on May 1 - rising 2 sen per litre. The double hike is due to the record high world oil prices reached this year, currently at about US$47.47 per barrel.

The ministry said diesel would now be priced at 83.1 sen in Peninsular Malaysia, 83.4 sen in Sabah and 82.8 sen in Sarawak.

Meanwhile, liquified petrolium gas (LPG) is priced at RM1.40 per kg in Peninsular Malaysia and RM1.48 for both Sabah and Sarawak.

According to Bernama , the government said the 5 sen increase will save the government RM695 million in oil subsidies.

Reduce burden on consumers

The Domestic Trade and Consumer Affairs Ministry would nevertheless continue to provide a subsidy of RM610.3 million just to keep retail prices of petroleum products in the country relatively low.

It added that the five sen hike ' ... was to reduce the burden on consumers'.

Rumours of an imminent price hike became rife when Domestic Trade and Consumer Affairs Minister Mohd Shafie Apdal said yesterday he expected an increase in petrol price to take effect 'very soon'.

However, the minister hoped that nobody would take the opportunity to increase the price of other goods.

"We just adjust the price slightly and we hope they (traders) will not increase the price of their items heftily. For example, when the price of petrol was increased two cents last time, the price of teh tarik went up by 10 to 15 cents," he claimed.

After presenting the 2005 Budget recently, Prime Minister Abdullah Ahmad Badawi also hinted at the possibility of an increase in the retail price of petrol but did not confirm whether the government had given green light to a price hike.

He also disclosed that the government has foregone RM10.7 billion annually in terms of revenue due to fuel subsidies.

Petronas questioned

Meanwhile, the DAP strongly opposed the increase of petrol price claiming that the national oil company, Petronas, could play a mkore pro-active role.

DAP secretary-general Lim Guan Eng said in a statement that before increasing fuel prices, the government should fully reveal sPetronas' profits in the interest of accountability and transparency.

Over the last five years, Petronas has averaged over RM20 billion in annual net profits and the company has amassed cash reserves of as much as RM65 billion.

"There will be a win-win solution if Petronas can act in the national interest by paying out the RM10.7 billion for annual fuel subsidies from its huge profits," he said.

He pointed out that based on the huge amount of oil-related tax revenue, Petronas has benefitted from the current rise in oil prices.

"It is regrettable that we do not know how much Petronas is earning, but we can be certain that Petronas can afford the RM10.7 billion in fuel subsidies required to maintain our present fuel prices," he claimed.

He urged the government to reveal Petronas's profits and utilise the huge profits for the benefit of ordinary Malaysians.

"As an oil producing country, Malaysians should enjoy the benefits of cheap fuel," Lim said.

'Unfair' to ask

In an immediate reaction, Minister in the Prime Minister's Department Mustapa Mohamed said it would not be fair to expect Petronas to bear the cost as providing subsidy was the responsibility of the government

"Petronas is a company and it is not reasonable to ask a company to give a subsidy. The government's method is easy. We receive the dividend from Petronas and we provide the subsidy," he was quoted as saying by Bernama when winding up his debate on the committee level Supply 2005 Bill in Parliament.

He added that the huge subsidy would cause the government to face a high budget deficit.

"For an example, last year alone, the country faced a deficit of 4.5 percent and for this year the government has aimed for a reduced deficit of 3.8 percent and due to this, it would be difficult for the government to give further support to petrol price," he said.

Any higher subsidy for petrol would mean that the government would have to cut back on other areas such as infrastructure, education aid and others.

Spillover effect

Meanwhile, PAS Youth chief, Salahuddin Ayub said although the government was footing RM70 million in petrol subsidies monthly, any further price increase would burden the people as there would be a spillover affect onto the prices of other consumer products and public services.

He reminded the government of its social responsibility to maintain petrol prices at affordable levels and not to burden the people with additional expense in view of the coming festive season.

Salahuddin suggested that the government allocate part of the RM3 billion oil royalty it receives from Petronas to offset the increase in price of petroleum products locally.