PUTRAJAYA - Price for RON95 petrol and diesel will be raised by 20 sen (S$0.07) per liter from midnight.
The move is aimed at reducing the fiscal deficit, thus saving RM1.1bil per year for the Government, said Prime Minister Datuk Seri Najib Tun Razak.
Najib said despite the increase, the government would still be subsidising 63 sen (S$0.24) for RON 95 petrol.
"The subsidy rationalisation will be carried out in many stages. The first is that the price of RON95 and diesel will be increased by 20 sen (S$0.07) per litre from 12.01am Tuesday," Najib told a press conference after chairing a meeting of the Fiscal Policy Committee (FPC) on Monday.
The new prices for RON95 will be RM2.10 (S$0.81) per litre and RM2.00 (S$0.70) for diesel.
To address the burden on low-income and vulnerable groups in the fuel subsidy rationalization, Najib said the quantum for the 1Malaysia People's Aid (BR1M) will be increased in the upcoming national budget announcement.
Najib also promised that a comprehensive "social safety net" and further fiscal measures would be introduced in the 2014 Budget.
He said the FPC has reaffirmed the Government's commitment to achieve a fiscal deficit target of about 3 per cent of gross domestic product by 2015 and to attain a balanced budget by 2020.